Last year, the Orbán government announced a wide series of handouts and tax cuts, the total amount of which is the highest ever since Hungary’s democratic transition in 1989-90. Most of the handouts arrived to the beneficiaries in February, less than two months ahead of the parliamentary elections. This month, families with children have received their tax refunds, pensioners their first extra 13th-month pension, and those under 25 obtained their exemption from personal income tax. Furthermore, minimum wage earners have just been granted their increased pay for January. In addition, substantial pay raises have been made in many sectors.
Viktor Orbán first announced a series of measures to provide financial support to various social groups of Hungary last September. Most of the benefits just arrived in the past weeks, less than two months before the parliamentary elections.
Even though the Prime Minister strongly denied it several times, at least some of the current measures are likely to be connected to elections, which analysts say will be closely contested.
Hungary’ tax authority only recently finished the transfer of the personal income tax refunds, after Viktor Orbán promised last autumn that the government will issue PIT refunds to all families with children next February. The measure covers 1.9 million parents getting support, and even though the payments are capped at the level of income tax paid by someone earning the average wage, the tax rebate is still worth a total of 600 billion forints (EUR 1.6bn).
Due to rising inflation, the government has also decided to increase pensions this year, while in addition pensioners were also granted an extra, 13th-month payment, which has been paid out in recent weeks. As a result, two-and-a-half million pensioners and recipients of pension-like benefits were granted an extra HUF 370 billion from the treasury.
In addition to families and the elderly, Hungarian citizens under the age of 25 were also granted benefits, namely an exemption from personal income tax. There are roughly one million young adults who will now see their net salary increase by 15%.
Those earning at the level of the minimum wage also received their increased January salaries this month, after the government flagged a nominal hike of almost 20% from monthly gross HUF 167,400 (EUR 473) to HUF 200,000 (EUR 542), in January 2021. The minimum wage of skilled laborers was also increased with a granted wage hike in numerous sectors as well.
Workers of the healthcare sector were promised a salary increase for 2022. Nurses have received a wage hike of 21 percent from January, while daycare workers and employees in the social and cultural sectors have seen their salaries rise by 20 percent.
The average monthly wage in the social sector was increased by 20 percent. In addition, the 21 percent wage hike for nurses, which will affect more than 85,000 healthcare workers, is the final step in the government’s wage increase program that was launched in 2019.
Viktor Orbán also announced a 10 percent pay raise for law enforcement officers as well as Hungarian soldiers for 2022. In total, around HUF 200 billion was paid to the members of law enforcement.
Featured photo by Szilárd Koszticsák/MTI