Weekly newsletter

Parliament Passes Bill Reintroducing 13th-Month Pension

Péter Cseresnyés 2020.07.06.

Parliament passed a bill on Friday allowing for the reintroduction of the 13th-month pension. The benefit will be progressively reinstated over four years.

According to the bill, in 2021, the first year of payment, 25% of an extra month’s pension will be added, in 2022, 50%, and in 2023, 75%. By 2024, a full 13th-month’s pension will be given to pensioners.

Thereafter, beneficiaries will receive the total amount each year, in addition to their January pension.

Coronavirus: Orbán Presents 5-point Economic Protection Plan, Announces Extra 13th Month Pension

Viktor Orbán announced in April that, in order to provide financial help for the elderly, the government would reintroduce the 13th-month pension, which had been abolished in 2009.

Fact

The 13th-month pension was first brought up during the 2002 parliamentary campaign by the then opposition MSZP (Socialist Party). Fidesz, in government at the time, considered the idea completely unjustified and accused the Socialists that their only goal was to get more votes from the elderly. MSZP eventually won the election, and fulfilled their promise, despite the fact that it was clear the proposal would add a huge burden to the budget. However, learning from the Socialists, Fidesz came up with a similar idea for the 2006 campaign: the introduction of the 14th-month pension. This was, of course, called a reckless proposal by MSZP. In the end, Fidesz did not win the election, and the pension system remained unchanged. By 2008, under the Gyurcsány government, due to the global economic crisis and the government's irresponsible economic policies, it became clear that serious reforms were necessary to avoid state bankruptcy. The measures also included cutting the amount of the 13th-month pension. Finally, in 2009, after the fall of the Gyurcsány government and after the formation of the Bajnai government, parliament passed the bill that completely abolished the 13th-month pension.

According to the new legislation, only those who have retired this year will become eligible. Those retiring from the upcoming January or later will have to wait a year. The new law is planned to take effect on January 1, 2021.

A recent survey shows that the majority of Hungarians support the reintroduction of the 13-month pension. At the same time, many criticize the Orbán-government for the decision, claiming the benefit to be no more than a tool for them to compensate for a possible loss of popularity as a result of the economic downturn caused by the Covid-19 epidemic. The timing of the reintroduction has also been lambasted: on the one hand, many believe that the post-coronavirus situation does not warrant such a decision (providing more benefits for the older and less active part of society when a cut in state revenues is expected due to the loss of jobs and stagnating wages); on the other hand, the 13th-month pension will be paid in early spring, which in the case of 2022, means that right before the election pensioners will be given 50% extra by the government.

Featured photo by Balázs Mohai/MTI