Announcing the Launch of SOS CzechiaPublished: Nov 22, 2022 Reading time: 8 minutes
During these difficult times, when people in the Czech Republic are affected by the consequences of the energy crisis and inflation, the Czech State can help. However, the people who can benefit from state aid often have no idea that it exists or what, exactly, they are entitled to. Worse still, people don't know how to ask for support. Some are also shy because it is the first time they need such help, and they do not want to be seen as "benefit abusers".
People in Need offers a helping hand to those in need living in the Czech Republic. Our 210 social workers and debt counsellors work in all regions of the Czech Republic. Since the beginning of the year, more than 17,000 people have called our helpline at 770 600 800. These people call because of their debts and foreclosures. In recent months, however, we have increasingly been dealing with high deficits and advances for energy. In order to be able to maintain our support and be able to expand it, we are launching our SOS Czechia collection. If possible, we encourage people to donate to 37893789/0300.
"In order to be able to maintain and, above all, expand our aid, we are announcing the SOS Czechia collection today. Although in exceptional cases, we will mediate food aid, we will mainly use the donated funds to strengthen the helpline and ensure social work and counselling in the field. I believe that most of us can handle the energy crisis and price increases in general. In the Czech Republic, we have already proven that in the past that when the going gets tough, we can help each other," says Šimon Pánek, Director of People in Need.
CONTRIBUTE TO SOS Czechia:
The State Offers Assistance and People Shouldn't be Ashamed to Ask for it
The state housing allowance can be a lifeline for many. A household with housing costs (rent, electricity, gas, utilities, water, etc.) exceeding 30% (35% in Prague) of net income can be entitled to housing allowance. This aid averages CZK 4,000 (€164) per month, so it is not insignificant. And although people's expenses are increasing, the number of people drawing this allowance has not increased significantly since September 2021.
"Today, even higher-income people are feeling the increasing pressure on their household budget. According to a May survey by PAQ Research, 20% of the population living in income poverty already faced great difficulties, and another 70% admitted difficulties. The situation of many families today is even more complicated. At the same time, according to a qualified estimate, only 25% of households from those entitled to it use it. In the case of the most vulnerable group, the elderly, it is only 15%. While approximately 150,000 households are currently receiving the allowance, 450,000 households are not, even though they are entitled to it," explains People in Need's debt and social issues expert Daniel Hůle.
"Since the beginning of the year, more than 17,000 people in need have called our helpline; this is almost double compared to the same period last year. People call us about their debts and foreclosures. Still, in recent months we have been increasingly dealing with high arrears and advance payments for utilities," points out Renata Bořkovcová, coordinator of debt advisors and the helpline.
How Did Our Helpline Help Lucie?
Our helpline helped Lucie, for instance, a single mother with a disabled child. She had successfully gone through the insolvency process and got rid of all her debts, but with the onset of the energy crisis, she was forced to start borrowing again. She solved her increased advances with microloans, but when a deficit for utilities worth CZK 23,000 (€944) came, she was forced to take out an even larger loan. By the time she contacted our advisor, she already had to pay CZK 150,000 (€6,000) in interest to the providers for her loans and a total of CZK 56,000 (€2,300), or CZK 11,000 (€452) monthly!
"First, I advised the client to apply for a housing allowance, which helped her pay for expensive energy bills. She managed to get it in the amount of CZK 2,436 (€100) per month. I also mapped all of her current obligations - four contracts with non-banking companies concluded in violation of the law were invalidated, with the fact that the client had already paid the original amounts owed in instalments. With two others, they managed to reach a settlement, which set her instalments of only CZK 240 (€10) for a period of 12 months to repay the sums up to the amount of the original loan," explains Jaroslav Mašek, a helpline adviser. He is still negotiating with the lender regarding the largest loan, CZK 19,000 (€780). The goal is that the ridiculously large monthly instalments of CZK 11,000 (€452) will become CZK 2,230 (€92), and the client will be able to pay it off herself and not need to take out additional loans.
The Helpline Helped Martina Receive a Monthly Housing Allowance of CZK 6,971 (€286)
Martina dealt with a similar situation. She told us that her energy supplier calculated that she had a deficit of CZK 36,000 (€1,478). In addition, she had to pay a monthly advance of CZK 7,000 (€287), instead of just CZK 2,600 (€108). For a single mother of two small children, who had already been forced to take out loans which totaled CZK 90,000 (€3,695) in the past, this amount was overwhelming.
Martina was in danger of falling into arrears (with the interest of CZK 250,000 (€10,267)!) and ending up with a foreclosure. She paid honestly until she had high arrears for utilities and an increase in advances. Thanks to the advice of the helpline, she applied for a housing allowance, which was granted in the regular amount of CZK 6,971 (€286). Within two months, it was also possible to invalidate all her credit agreements with non-banking companies, which were concluded illegally. In addition, the companies had to return to her the overpayments of the original amounts owed in the amount of CZK 92,000 (€3,778). Today, Martina is not only debt-free, but also had enough to pay the arrears for utilities and will still have a nice Christmas with her children. "Once again, thank you very much for everything. You saved my mental health," happy Martina sent her thanks in writing to our counsellor.
Why is Our Helpline Effective?
We will try to illustrate with simple numbers why we consider the aid provided by our helpline to be so effective. We need CZK 225 (€924) which his the consultant's salary in order to process one request for help. The result can be the provision of six-month state support in the average amount of CZK 4,000 (€164), i.e. CZK 24,000 in total (€285). Or a specific proposal on how to prevent foreclosure
What Are We Planning Next?
We have a team of 210 social workers and debt counsellors directly in the field, which we want to maintain and strengthen. Our support does not end with a single consultation.
"The field social worker or worker with the client analyses the income and expenditure situation and evaluates what they are entitled to from state social support and material hardship benefits and how they can apply for themselves. Additionally, counsellors help with filling out forms, dealing with the authorities, explaining anything incomprehensible to the client and advises on further necessary steps," says Kateřina Dosoudilová, head of social services.
The helpline provides a comprehensive service that also includes essential advice on how to save energy at home, how often and how much to increase your deposits and thereby avoid high arrears. It also helps, for example, with the selection and negotiation of a change of supplier or payment schedule for the existing one in case of large arrears, and also to determine the amount of instalments so that the client can afford to pay them. The same service is also provided, for example, to the lessor of an apartment if it is necessary to negotiate and set instalments of unpaid rent after receiving the housing allowance. In the event of an emergency, it also provides or mediates for food aid, arranges extraordinary immediate assistance and everything else that is needed until the client's situation stabilises.
A field worker helped Vladimir, who had no food left after paying his increased advances
As is the case with Vladimír, a senior citizen who had no money left for food due to an increase in energy advance payments. Or, in the case of a ninety-one-year-old couple who turned to us in desperation, saying that the supplier had cut off their gas without warning because they did not agree to an increase in deposits from CZK 4,000 (€164) to CZK 22,000 (€903). They couldn't get water or cook anything, and they both got sick.
The field worker also responds flexibly to other findings, e.g. if the client has any pre-existing debts, teaching basic information and possibly connecting them with our debt counsellors.
We are negotiating with ministers and politicians to ensure households do not run up even more debt
As well as helping people directly, our organisation strives to bring about systemic change. "Since the autumn of last year we have been actively involved in drafting proposals to adjust the parameters housing benefits. We are part of a working group of the Ministry of Labour and Social Affairs that is in charge of this agenda. We discuss systemic changes with the Minister and other politicians on an ongoing basis. In particular, we have been involved in adjustments to the normative costs that set the ceiling for the housing allowance, as early as the turn of 2021 and 2022, as well as now since October, when there has been a significant increase, especially for one- and two-person households, which mainly affects poor seniors," says our expert on social and debt issues, Daniel Hůle.
Similarly, we have sought to valorise the minimum subsistence level, which affects a number of social benefits, such as child benefits. It finally happened in April 2022, June and the next increase will take place again from January 2023. We have also repeatedly negotiated the valorisation of child benefits themselves, which will take place from January next year.
"The aim of the changes we are advocating is to ensure that the benefits can respond to the sharp rise in prices, because a delay in state aid can easily lead to an increase in unsolvable household debts," Daniel Hůle points out.
For all additional energy-related questions, please visit this site (available in CZ).
* all names have been changed at the request of our clients