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Social rights in Hungary

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Hungary is a top tourist destination and has about 10 million residents. The largest cities in the country are Budapest, Debrecen, Szeged, Miskolc, Pécs, and Győr.

If you plan on attaining long-term residency in Hungary, you need to know how the system will favor you as a resident. In this guide, We’ll be going through the most essential parts of the Hungarian social security system.

How does social welfare work in Hungry

The Social Security system in Hungary is controlled by the Ministry of National Resources [Emberi Erőforrások Minisztériuma]. The Republic of Hungary has a lot of social security bodies that ensure that the wellbeing of its people is secured.

One of the biggest social security systems in the country is the National Health Insurance Fund (Országos Egészségpénztár), which administers cash benefits to the sick beneficiary (táppénz), maternity benefits (TGYÁS), and childcare benefits (GYED).

There are also other bodies that administer social contributions like the Hungarian State Treasury (Magyar Államkincstár) that oversee family allowance (családi pótlék) and social child care fee (GYES).

The Central Administration of National Pension Insurance (Országos Nyugdíjbiztosítási Főigazgatóség), which oversees state pensions and the National Tax and Customs Administration (Nemzeti Adó és Vámhivatal), which collects some of these contributions.

Both employers and their employees are required to pay social security contributions in the country. There are several contributions paid by these individuals, which add up to 40% of an individual’s salary.

Payment is automatically withdrawn from employees’ salaries by their employer and paid into the system. While self-employed individuals have to pay the required contribution themselves.

Hungry laws have a lot of provisions that allow its citizens, refugees, and residents to enjoy social welfare and international protection. The government of the state offers a lot of social assistance to certain beneficiaries that have reached a certain number of years of established domicile.

International protection is given to people who are retired, have limited public health care, unemployment benefit, or any other entitlements such as family allowances, sickness, and maternity benefits. While social welfare is for beneficiaries under the same conditions or level as Hungarians.

Social assistance is provided by competent local governments or district government offices. So the rules and mode of conduct vary between districts and local governments.

Jobseeker benefits must have at least 365 days of coverage whether the beneficiary is employed or self-employed in the last 3 years. But beneficiaries of international protection get insured right after receiving protection.

Types of social benefits

These are some of the most popular social benefits for individuals in Hungary.

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Unemployment benefits

The unemployment benefit system in Hungary consists of two different schemes. A contributory scheme for job-seekers’ benefit [álláskeresési járadék] and a non-contributory scheme for pre-pension job-seekers allowance [nyugdíj elötti álláskeresési sagely].

Any individual who is registered as a job-seeker with the District Office of the state or County Government Office can get social benefits if he/she has worked for at least 360 days within the 3 years before becoming a job-seeker.

He/she is entitled to a job-seeker benefit of 1 day’s benefit for every 10 days he/she worked. This means that the minimum entitlement is 36 days and a maximum of 90 days.

Housing benefits

There is only one guaranteed minimum income scheme In Hungary, employment substituting support [Foglalkoztatást helyettesítő támogatás]. While local governments or district authorities can provide financial aid to assist with housing costs in the form of a local benefit [települési támogatás].

If there is no representative for the housing benefit scheme, the housing benefits are modeled in TaxBEN. There are also other housing benefits that assist the employee’s mobility.

These systems were set up to ensure a minimum standard of living for individuals that are employed or of working age.

Family benefits

The family support system in Hungary is a universal scheme, thus every Hungarian can benefit from it. All nationals, legal residents, migrant workers, refugees that are 23 years and above are entitled to different types of family support benefits,

Newlyweds are also entitled to a specific tax allowance that is financed out of the central budget while parents’ raising a child is eligible for family allowance. These benefits are provided from the child’s birth up to compulsory schooling age [nevelési ellátás].

Child care benefits

Besides the regular child allowance, parents/guardians also receive a pension-like benefit entitled to a cash benefit of HUF 6,270/month or per child.

They may also receive an extra HUF 8,400 twice a year (in August and in November). Most parents are not qualifying for this benefit but rather grandparents being guardians.

How to fulfill social security contribution

The minimum contributions payable depend on your monthly minimum wage.  Most employers pay a social contribution tax of up to 19.5% and an extra 1.5% on vocational contribution.

While employees are mandated to pay 10% for pension contribution, 8.5% on health insurance and labor market contribution, and 15% in personal income tax. 

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