Factsheet for measure
HR-2022-40/2829
–
Updated
– measures in Croatia
Subsidies and fiscal bonuses for rising energy prices and inflation
Subvencije i fiskalne olakšice vezane uz povećanu cijenu energenata i inflaciju
Background information
In order to mitigate the consequences of rising energy prices due to the war in Ukraine, it is proposed to pay out a one-time monetary income for the beneficiaries of the child allowance. Also, it is proposed to pay a one-time payment income to beneficiaries whose procedures for realizing the right to child allowance are in progress, and whose right to payment of the child allowance is recognized by 30 September 2022. The similar form of pecuniary aid is intended for some other vulnerable groups in Croatia. Among others these are pensioners with a small amount of pension, jobless persons which are eligible to the unemployment benefits. Furthermore, it is proposed to pay a one-time monetary income as social assistance families that are exposed to economic instability and the risk of poverty, especially in conditions of rising inflation.
Content of measure
Parents who receive child benefits will receive a one-off payment of €40 for one child, €67 for two children, €93 for three children, €120 for four children and €145 for five children. Pensioners with a monthly pension of up to €247 will receive a one-off payment of €160, those with a pension of between €247 and €313 will get €120, those with a pension of between €313 and €447 will receive €80 and those with a pension between €447 and €581 will be paid a one-off amount of €53. The total cost of this scheme is estimated at €60 million. Unemployed persons registered with the Croatian Employment Service on 1 September 2022 will be paid €33 for October, November and December 2022. Vulnerable energy consumers and foster parents will see their state subsidy increase from €53 to €67. Non-taxable income for students will be increased from €2,000 to €3,200 for income earned in 2022. The government also prepared a €13.3 million aid package for farmers, and the same amount was also earmarked for fishermen. Transport operators will receive a subsidy per liter of diesel fuel.
Updates
The following updates to this measure have been made after it came into effect.
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31 March 2023
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The new measures are grouped into three main areas, intended to offset the rising cost of energy and record-high inflation, plus a new set of subsidies and incentives. The Government will continue regulating the prices of natural gas – widely used for heating – as well as electricity prices, until at least the end of September 2023. Some fuel costs will also continue to be subsidized. The Government listed the vulnerable groups which will be covered by this latest set of measures. These include retirees receiving state pensions in an amount less than €610 per month, everyone receiving child payments, the unemployed, veterans of the War of independence 1991-1995, fishermen, farmers, and the transport sector. Subsidies will also be provided for investments aimed at improving energy efficiency. Some 128,000 families and 230,000 children would be entitled to higher child payment claims – from €45 per month given to families with a single child, up to €160 for families with five children or more. In February, September, and December 2022 Government rolled out a series of measures designed to tackle the cost-of-living crisis, totalling some €3.5 billion. These included a mix of tax breaks, increased social benefit payments, and subsidies for energy and fuel costs. The latest set of measures was also eagerly awaited by local governments throughout the country, as the cost of energy has become a serious burden for their budgets, and lifting the price caps originally imposed in 2022 would have presented a serious risk to their self-sufficiency. The measures will be implemented from 1 April 2023.
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22 December 2022
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As a measure to lessen the consequences of inflation and energy price growths, the Government on its meeting on 22 December 2022, decided on another aid package that would help the most financially vulnerable citizens. The measures include pensioners with the lowest pensions, people with disabilities, the unemployed, all recipients of the social assistance and child allowance, what is a total of about one million of citizens. For this purpose, the state will allocate a little more than HRK 700 million (€93 million). Pensioners with a pension of up to HRK 4,360 (€579) will receive a one-time financial aid, and depending on the amount of the pension, the supplement amounts to HRK 400 (€53) to HRK 1,200 (€159), while those with the smallest pensions will receive up to HRK 1,850 (€246). Recipients of the social assistance will receive HRK 1,000 (€133). One-time aid to beneficiaries of the child allowance, depending on the number of children, amounts from HRK 300 (€40) to HRK 1,100 (€146). The victims of the earthquake who are still in temporary accommodation, will receive in amount HRK 2,000 (€266) per person, and a maximum of 10,000 (€1,328) per one household.
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08 September 2022
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In Croatia as a form of social aid exists Compensation for an endangered buyer of energy products (Naknada za ugrozenog kupca energenata). It is granted to a single person or a household which, due to meeting extraordinary living expenses caused by current life circumstances (birth or education of a child, illness or death of a family member, natural disasters, etc.) is unable to meet basic life needs. It can also be recognized:
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for the purchase of basic items in the household or for the purchase of necessary clothes or shoes if the purchase cannot be provided through humanitarian organizations
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for a child or a younger adult beneficiary of the service of accommodation in a foster family for the purchase of compulsory school textbooks
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to the user of the accommodation service in crisis situations for reimbursement of the costs of transportation to other places of residence, own or foster family, social care home, with another service provider.
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to the user of the accommodation or organized housing service in the case of a current need that cannot be met within the framework of the accommodation or organized housing service. The government decided that its monthly value during the period from 1 October 2022 to 31 March 2023 will be HRK 500 (€66.4) instead of regular HRK 200 (€26.5) or increase amount for 2022 HRK 400 (€53.1).
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Use of measure
Regarding the use of the measure, in the fiscal system, the most important are the increases in the amount of non-taxable salary bonuses from €400 to €667 per year, and in non-taxable rewards for work performance from €664 to €1,000. Non-taxable lump-sum amounts to cover workers’ food expenses are increased from €664 to €800 annually, and non-taxable pension severance pay is increased from €1,066 to €1,330. According to the official data some 130,000 parents in Croatia receive child benefits. According by the Croatian Institute for Pension Insurance, of all 953 thousand persons which achieve pension according to the Pension Insurance Act, almost 80% of them are eligible to the mentioned supplement for pensioners, of which around one quarter will obtain the biggest supplement amount. According to the data by the Croatian Employment Service (CES), in August 2022, there are registered 110,420 unemployed persons in Croatia.
Target groups
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Workers
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Businesses
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Citizens
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Does not apply to workers
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Does not apply to businesses
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Applies to all citizens
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Actors and funding
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Actors
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Funding
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National government
Public employment service
Social insurance
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National funds
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Social partners
Social partners' role in
designing the measure
and form of involvement:
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Trade unions
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Employers' organisations
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Role
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No involvement as case not in social partner domain
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No involvement as case not in social partner domain
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Form
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Not applicable
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Not applicable
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Social partners' role in the
implementation, monitoring and assessment phase:
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No involvement
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Main level of involvement: N/A
Involvement
Due to the nature of the measures related to subsidies and fiscal bonuses, social partners were not included.
Views and reactions
The Croatian Employers' Association welcomes the announced increase in tax-free receipts as the first step in the necessary relief of wages in order to increase the competitiveness of Croatian employers. Trade unions deem that the measure respects the principle of fairness and are well targeted to the most vulnerable.
Sources
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08 September 2022: Jednokratnog novčanog primanja korisnicima mirovine (One-off payment to pensioners)
(vlada.gov.hr)
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08 September 2022: Porezne olakšice i promjene (Tax deductions and changes)
(vlada.gov.hr)
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08 September 2022: Novčana pomoć nezaposlenima (Monetary aid to unmployed persons)
(vlada.gov.hr)
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08 September 2022: Temporary increased amount of compensation for energy (Privremeno povećanje naknade za energente)
(narodne-novine.nn.hr)
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09 September 2022: Jednokratna pomoć primateljima dječjeg doplatka (One-off payment to parents who receive child benefits)
(vlada.gov.hr)
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22 December 2022: A new aid packet to poor citizens (Novi paket pomoći siromašnim građanima)
(vijesti.hrt.hr)
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16 March 2023: The Government presented a new relief package (Vlada predstavila novi paket pomoći)
(razvoj.gov.hr)
