The benefit provisions in Article 12 apply to old-age, survivors and disability pensions under the Czech social security system.
Benefits under the Czech system are paid to workers who meet the applicable eligibility requirements, including minimum length-of-coverage and recency-of-work requirements. Under the rules established in Article 12, the Czech Republic will add a person's U.S. social security coverage to periods of Czech coverage, if necessary, to meet the minimum coverage requirements. If the person meets the requirements based on combined U.S. and Czech coverage, the Czech Republic will pay a pro rata (i.e., partial) benefit that is proportional to the amount of coverage credited under the Czech system.
CZECH SOCIAL SECURITY BENEFITS
RETIREMENT BENEFITS
Czech retirement benefits are payable at normal retirement age to workers who have at least 25 years of coverage. Normal retirement age is set at age 63 for both men and women. However, the normal retirement age for women who have had children is reduced, and ranges from 59-62 years according to the number of children. A worker of either sex who is at least 65 years old may retire with only 15 years of coverage.
All Czech benefit amounts consist of two parts: a flat-rate basic amount and a supplementary earnings-related amount. For retirement benefits, the flat-rate basic amount is currently 1,470 CZK a month and the earnings‑related amount is 1.5 percent of the worker's average indexed monthly earnings for each year of coverage.
Workers receive a delayed retirement credit of 1.5 percent of average indexed monthly earnings for every 90 days of employment or self‑employment after initial eligibility and before filing a claim. A minimum retirement pension is set by law.
DISABILITY BENEFITS
The Czech social security system pays two types of disability benefits: full disability benefits for workers with reduced capacity of at least 66 percent for any economic activity, and partial disability benefits for those with at least a 33 percent disability or a significant deterioration in general standard of living. Workers age 28 or older must have at least 5 years of coverage out of the 10 years immediately preceding disability onset or coverage in any 10 year period after disability onset in order to qualify.
Disability benefit amounts consist of the same basic flat-rate amount as for retirement benefits, and an income-related amount equal to 1.5 percent of the worker's average indexed monthly earnings for each year of coverage. The period between the date of the worker's disability onset and retirement age is deemed to be periods of coverage for purposes of determining the benefit amount.
The basic flat-rate partial disability pension is 770 CZK per month as of January 2006. The income-related benefit is equal to 0.75 percent of the average indexed monthly earnings for each year of coverage. Minimum full and partial disability pensions are established by law.
SURVIVORS BENEFITS
For survivors benefits to be payable, the deceased worker must have met the coverage requirements for entitlement to either a retirement or disability benefit at the time of death. A surviving spouse may generally receive benefits for one year. After the first year, benefits are only paid to a surviving spouse who is disabled or who has attained age 55 (women) or age 58 (men). A surviving spouse may also continue to receive benefits if caring for a dependent child, a parent of the deceased worker or his or her own partially disabled parent over age 80. Surviving minor children are eligible if they were dependent on the worker at the time of death.
Survivors receive both a basic flat-rate payment and an income-related payment. The flat-rate payment is the same as for retirement benefits. The income-related amount for a surviving spouse equals 50 percent of the deceased worker's actual or anticipated retirement benefit. Each surviving child receives 40 percent of the deceased worker's actual or potential benefit. No family maximum exists. A minimum survivors pension is guaranteed by the Czech system. An additional lump-sum benefit (5,000 CZK in 2006) is paid for funeral expenses.
COST-OF-LIVING ADJUSTMENTS
Pensions are adjusted in January of each year by the same percentage as the change in prices over the 12 months ending in June of the previous year. At the same time, pensions are also increased by at least 1/3 of the average real wage growth in the 12 months prior to January 1 of the previous year. In addition, the government is authorized to increase pensions by decree if the aggregate consumer price index has risen by at least 5 percent since the month preceding the month in which the last increase was made.