5 new Flash Reports prepared by the European Social Policy Network (ESPN) are now available and provide information on recent social policy developments in Austria, the Czech Republic, France, Latvia and Poland.

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Austria: Large “inflation relief package” enacted

Against the background of a strong increase in inflation, the Austrian Federal Government decided to implement an “inflation relief package”. As part of this package, low-income households will directly benefit from one-off payments and from indexation of specific social transfers, whereas the structural measures related to income tax will primarily benefit households on higher incomes.

A tax relief measure to support part-time jobs in the Czech Republic

The government has prepared a measure to support part-time jobs for selected groups of employees. The measure reduces the employer’s social security contribution rate from 24.8% to 19.8%. It aims to increase employment of people who are either in vulnerable situations/categories, face early exits from the labour market or difficulties in reconciling work and family life. Experts had long argued for greater support to these groups of people in the labour market, so the proposed measure has not been controversial. The government took advantage of the current economic situation and pushed the measure through Parliament in June 2022, for entry into force in February 2023, but the accelerated approval process did not allow for a proper discussion of some aspects of the measure.

Combating energy poverty in France: a decade of experience

Twelve years after the adoption of a policy to combat energy poverty, energy insecurity remains stable and high. This can be put down to two main factors: the juxtaposition of diverse measures that lack visibility and societal support; and a constant swing between policies targeting energy poverty, on the one hand, and the ecological transition, social or environmental issues, on the other hand. The recent establishment of an “energy cheque” and the regulation of property markets point in a more promising direction.

Will enhancement of non-contributory elements in Latvia improve the adequacy of pensions?

In May 2021, following the Constitutional Court ruling on the inadequacy of minimum pensions in Latvia, the Welfare Ministry proposed the introduction of a (flat-rate) basic pension. This was intended to replace the current minimum pension subsidy and pension supplements. A year later, the approach has changed radically: the ministry no longer envisages a basic pension, but is reintroducing supplements based on years of service, making them a permanent and increasingly important part of the pension formula, keeping the acquisition of pension rights closely linked to the person's work history. This move may increase income inequality in older age groups, and its specific impact on the adequacy of minimum pensions is debatable.

Poland: New tax benefit solutions improve incomes of families

In January and July 2022, significant changes were made to the Polish tax and benefit system. On the tax side, the most important changes include a reduction of the base rate, and an increase in tax-free quotas and in the threshold from which tax rates increase. Families with 4 or more children will have higher tax exemption quotas. The healthcare contribution is no longer deducted from the tax paid. On the benefits side, families with children aged between 12 and 35 months will be eligible for new social benefits (the Family Care Capital) or additional benefits to cover ECEC expenditure.