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Inside Hungary’s Family Support System

Gábor Sarnyai 2018.12.10.

Hungary usually cannot boast a first place spot among OECD countries, however, the GDP ratio it has allotted to its family benefits system is the highest. In the past eight years, the government has continuously increased funds devoted to family benefits. The 2019 budget allocates 2000 billion forints (1 billion HUF is 3.2 million euros) to family policy goals—twice as much as in 2010.

It is rare to find a government that takes their family policy as seriously as the Hungarian state: 4% of the GDP is dedicated to it. In this manner, Hungary qualifies for first place among the 35 OECD countries. The question of demographics and the support of large families has always been a top priority of the Fidesz government. In Orbán’s 2000 State of the Nation Address, he used the catchphrase “three rooms, three kids, four wheels” which eventually became the slogan of his 2002 campaign. Over the past eight years, family policy has become an even more important government priority due to the historically low birth-rate resulting from the 2006-08 recession and youth migration.

Hungarian Gov’t Aims to Create Baby Boom with Generous Financial Help

Fidesz’s 2010 rule changed many aspects of the family support system. Not only has the amount of funds allocated for family policy increased, but a serious effort has gone into giving the middle-class incentives to have children. While previous governments offered universal, basic family benefits favoring the poorer classes (perhaps inadvertently), the current government has tried to provide the middle and upper class with more family support.

Fidesz has not increased the universal family allowance in the past nine years. In September 2010, they tied family allowance to school attendance. According to the Ministry of Human Capacities, the 2009/10 school year, compared to 2016/17, saw a significant drop (by 62%) from 29 thousand to 11 thousand in students with more than 50 unexcused absences. As of September 2015, enrollment in Kindergarten became a requirement for receiving family benefits.

The government will introduce a line of tax breaks in support of working families as well. These allocated taxes aid around one million families in child-rearing. The most significant improvement is the 2011 family tax break which decreases monthly taxes by 10 thousand forints for one child, 10 thousand forints for two children (in 2018 it was 17.5 thousand, and by next year it will be 20 thousand), and 33 thousand for three or more children. From 2014, aside from personal income tax, this is applicable to retirement and health insurance taxes too.

Marriage has been simplified and encouraged by various government programs as well. In 2015, a tax break for newlyweds was enacted (a couple can qualify for a maximum of 5000 forints monthly). Starting in 2017, every new married couple qualified for two years—even if they had a child within that time span. Since January 2018, Hungarians with official birth certificates who were born in or live outside of Hungary and those born in neighboring countries with Hungarian ID cards could take advantage of the maternity and Youth-Lifestarting benefits. The amount of marriages in the recent past has grown. Within seven years, the annual marriage rate has increased from 35,500 to 51,800. An increase this drastic last occurred in the years following WWII (between 1945 and 1950). The government also aims to help couples struggling to conceive. Aside from federally supported IVF programs, social security now covers 90% (up from 70%) of medicines required for fertility procedures.

Some 773,000 Participate in Natl Consultation on Family Policy in First Month

The government has come under criticism for promoting traditional family roles. Prominent Fidesz leaders have publicly said many times that a woman’s most important task is to have a child. However, the government’s family support system actually helps women return to their jobs after giving birth. When child support allowances (GYED) expire, mothers have the right to return to their jobs and work part-time for three years. Mothers with at least 3 children can take advantage of this until their youngest child becomes 5 years old. According to the government, the employment rate of women between the ages of 15-64 was 61.3% in 2017 which marks an 11 percent improvement compared to 2010 (50.2%).

Image: Válasz.hu