It is the Government’s high priority to support families with several children. In this spirit, ruling party Fidesz is currently working on further family policy measures aiming to make having children more attractive and at the same time favour employees.
Government spokesperson András Giró-Szász informed the press that the Government had reviewed its family policy and demography action plan and has decided to expand the availability of family tax allowances. In line with the decision, those who cannot fully take advantage of the allowance by deducting it from their 16 % personal income tax, can also deduct the sum from the 7 % health insurance contribution or the 10 % pension contribution. The cabinet will discuss the next phase of the action plan, including the introduction of flexible childcare benefit (GYED) in September, he added.
The extension of family allowances constitutes a great step ahead for lower income groups, family policy advisor to the Prime Minister Fidesz MP Máriusz Révész announced on Wednesday, adding that the measures also aim to avoid putting excessive administrative burdens on families. He further said that the planned flexible childcare benefit system will involve pre-calculating how much benefit would be paid during the three years of maternity and childcare leave, and the mother would decide how long she would like to benefit from it. The amount due for three years will not be lost even if the mother decides to have another baby in the meantime. It has also been proposed that the years spent in higher education should be considered as an employment relationship, thus breaking the current scheme of the family support system being linked exclusively to the career path. Under the Job Protection Action Plan introduced last year, the employment of women with small children has increased significantly, Máriusz Révész also announced, pointing out that if mothers with small children return to work from child care/maternity leave, no employer contribution payment is required in the initial two years, thus considerably increasing their job prospects. In the same spirit, the governing party has proposed the extension of this period to eight years.
Hungary’s Government has introduced the family tax system in combination with one of the lowest tax brackets in Europe, producing significant and tangible results within a short time, with preliminary figures showing that more than 840,000 people saved a total of 158 billion forints thanks to the allowance last year. The allowance is a monthly net 99,000 forints (EUR 340) for three children, which has resulted in an average increase of 24 per cent in the monthly net income of families with three children. The latest figures also show great progress when it comes to women’s employment, which currently stands at 53% according to Eurostat data, the highest level since 1992. The extent of the increase places Hungary among the best within the European Union.
(Prime Minister’s Office)
