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800 plus instead of 500 plus. Since when, for whom? Everything you need to know

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500 plus is to turn into 800 plus. This will be the first indexation of the benefit since the launch of the Family 500 plus program. Who will receive the higher benefit? From when will 800 plus be paid out? What will the cost to the budget be? Will there be an annual indexation of 500 plus? Below we write about what we know so far.

The Family 500 plus program was launched on April 1, 2016. President of Law and Justice Jaroslaw Kaczynski on Sunday announced the first valorization since the program came into force benefits 500 plus up to PLN 800.

800 plus – for whom

The Ministry of Family and Social Policy assured that the rules for granting the benefit would not change. This means that 800 plus will be available to all children under 18, regardless of the family’s income.

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According to government estimates, over 6.5 million children are currently benefiting from the programme.

800 plus – since when

Minister Łukasz Schreiber in the Chancellery of the Prime Minister, Łukasz Schreiber, assured on Tuesday in “Rozmowo Piaseckiego” on TVN24 that the law on increasing the benefit in the 500 plus program to PLN 800 will be adopted during this parliamentary term.

The higher benefit is to be paid from 1 January 2024.

Leader of the Civic Platform Donald Tusk on Monday, he proposed that the changes should be introduced faster, because from June 1 this year. – President, if you really want to help Polish families, and not play an election game, we can do it together in the Sejm, so that this valorization of the benefit for Polish children becomes a fact on Children’s Day on June 1, and not on New Year’s Eve 2024 – the former addressed Prime Minister to PiS President Jarosław Kaczyński. The PO bill on accelerating the increase of the benefit from PLN 500 to PLN 800 is to be submitted to the Sejm on Wednesday.

Tusk: On Wednesday we will submit a bill on indexation of the 500 plus benefitTVN24

However, government representatives are critical of Donald Tusk’s proposal. – From January 1 (2024 – ed.) because we have it planned in the budget plan – explained family minister Marlena Maląg on Tuesday in RMF FM. Prime Minister Mateusz Morawiecki indicated that the payment of 800 plus will start from January next year, when inflation is to be in a strong downward trend.

800 plus instead of 500 plus – cost for the budget

Economist Alicja Defratyka calculated that the increased benefit from PLN 500 plus to PLN 800 will cost the budget PLN 64 billion annually. Currently, it is about PLN 40 billion.

Similar estimates are presented by the rulers. As Prime Minister Mateusz Morawiecki said on Monday at a press conference, “800 plus, i.e. an additional PLN 24 billion (…) is about 0.7-0.8 percent of GDP (gross domestic product)”.

The head of the government announced that the increase in the 500 plus benefit to PLN 800 will be financed from further tightening of the tax system and higher budget revenues as a result of stronger economic growth.

He noted that the tax system will continue to be sealed. – Not more than six days ago, Minister Magdalena Rzeczkowska submitted another bill to the Council of Ministers, another billion to seal VAT and CIT. Hence the additional funds planned also for next year – explained Mateusz Morawiecki.

Read also: They turned on the money tap, now they are the infamous leader of the EU

How much is 500 plus worth today

What is the real value of 500 plus today? It was calculated by the economist Rafał Mundry. According to the data posted by him on Twitter, PLN 500 from April 2016 is worth PLN 339.54 today. This means that the purchasing power of the 500 plus benefit has decreased by about one third since 2016 and today for PLN 500 we will buy about one third less than 7 years ago.

Mundry noted that “the first indexation of 500 plus in seven years means that the value of 500 plus will again be at a similar level as in 2016”. The purchasing power of the benefit of PLN 800 in April 2023 would be PLN 543.26.

500 plus – annual indexation

The Left proposes that the 500 plus benefit be indexed annually. – There is no such decision yet. At the moment, we are working, analyzing (…) – said on Tuesday in Radio Gdańsk Deputy Minister of Family and Social Policy, Stanisław Szwed, when asked about the voices about the need to introduce an annual indexation of the 500 plus benefit.

As he added, “we have to be patient when it comes to the final shape of the changes.”

On the other hand Polish People’s Party proposes that 800 plus should be granted to working people. “Poles expect specifics and appreciation of activity. That is why we propose: valorization of 800 plus for working people, additional work and overtime without taxes, voluntary ZUS for the self-employed. Work must pay off,” wrote the leader of the People’s Party, Władysław Kosiniak-Kamysz, on Twitter.

800 plus – impact on inflation

Economists are concerned about the effects of fulfilling the promise of increasing PLN 500 plus to PLN 800, especially its impact on the already high inflation.

– Generally, this will be a pro-inflationary measure and will hinder the task of the National Bank of Poland when it comes to lowering inflation to the set target through interest rates. This effect can be quite strong if the increase is implemented in the manner announced by the president Jarosław Kaczyński – immediately to the level of PLN 800 from 2024 – Szymon Wieczorek, an economic expert of the Jagiellonian Institute, said in an interview with TVN24 Biznes, noting that as a consequence this may even lead to further increases in interest rates.

The change of the Family 500 plus program into the Family 800 plus program is also described as a pro-inflationary factor by economist Marek Zuber from the WSB Academy. If we add money, it means relatively more consumption, that is, more demand, and more demand means more inflationary pressure. Of course, we can discuss how much inflation will increase, but it does not have to grow, it is enough for it to fall more slowly, but this effect will certainly occur – explained Zuber.

Read also: “This is pouring high-octane gasoline into an inflation fire”

According to government spokesman Piotr Mueller, raising the 500 plus to PLN 800 will not translate into inflation as much as imagined by the representatives of the “Balcerowicz-Tuska” school. – We are not afraid of this, because issues related to inflation predictions are currently on a downward trend. Our goal is to ensure that families most affected by inflation have additional support, Mueller said at a press conference on Monday.

Main photo source: Shutterstock

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