As of this autumn new benefits have been introduced in Hungary to help tens of thousands of families who raise and care for children. From 2 September 2024 up to 50,000 HUF, and in some cases, 65,000 HUF per month in non-refundable benefits will be available for day-care and meal fees, while from 1 October tens of thousands of self-employed people with special taxation will be able to benefit from home creation supports and the baby expecting subsidy. The government is also expected to double the family taxation in the coming two years, to almost 2.4 million HUF a year for a family with three children. Doubling the amount of the tax credit will mean a significant extra monthly income for all working parents.

Applications for Nursery Fee Subsidy Open Again

Over the past fourteen years the Hungarian conservative government has introduced more than thirty measures that have significantly improved the living standards of Hungarian families, creating stability at the same time. These family-friendly measures that are unique in Europe aim to support home creation, strengthen financial security for families, encourage births and also promote work-life balance, as working and having children have a positive effect on the well-being of Hungarians. The government is committed to supporting the employment of families with young children and to better reconciling family life and work, which will also have a positive impact on the labour market.

Among a number of other measures that support the return of parents with young children to the labour market, the nursery fee subsidy announced in 2019 has helped 10,300 children to get placed into nurseries in the timeframe of three years, enabling 9,700 parents with young children to return to work. The subsidy, for which applications can be submitted from 2 September this year, provides a higher monthly support of 50,000, and in some cases, e.g. single-parent families, 65,000 HUF, for those parents returning to work whose children are in nursery or day-care. Parents living in rural areas whose children attend a mini, family or workplace nursery or day-care centre are entitled to a reimbursement from the Hungarian State Treasury, which can be requested for more than one child. For the first time, parents with young children who place their children in a nursery that is maintained by the municipality can also apply for support. The payments can be claimed retroactively and will be available until the end of October 2027.

In Hungary nursery care is now available in one in three municipalities, which also has a positive impact on the employment prospects of parents with young children. According to previous research by KINCS on the choice of nursery care by mothers with young children, the need for nurseries is increasing as mothers return to work. 50 per cent of mothers who participated in the survey said that they would like to use this care when their children are between 1 and 2 years old and 45 per cent after their children reach the age of 2 in order to be able to return to work. It is precisely their needs that the new measure responds to, with the state providing significant support for working parents.

The Hungarian state also aims to ease the financial burden on parents by providing free or reduced-price meals for children. Of the 130 billion HUF allocated to providing children with meals, the Hungarian state will supply children aged 0–3, who are not in institutional care, with packages of non-perishable food, while free or reduced-price meals will be available in nurseries, kindergartens and schools for a total of 600,000 pupils. The government has also extended the school milk and school fruit programmes to ensure that children have regular access to dairy products and fresh fruit. Currently, 2,500 schools are participating in the school milk programme and 2,300 in the school fruit programme, with the amount allocated to this purpose increasing eightfold.

Easier Access to Benefits Aiming to Help Young Couples Start a Family

To support families who are raising or planning to have children, the government will introduce a new measure from 1 October to make it easier for self-employed people who opt for special taxation as well as for primary agricultural producers to claim the CSOK Plus, the Rural Housing Subsidy Rural CSOK loans and the baby expecting subsidy. The aim is to make these benefits more accessible to self-employed people. In their case, banks used to take only 10 to 20 per cent of their income into account when assessing their loan applications but will now be obliged to recognize at least 50 per cent of their earnings as income. The modification will also allow them, in addition to self-employed persons under the KATA (Small Business Taxpayers) scheme, to qualify for these state-subsidized loans with one year of social security instead of the two or three years that were required until now. This will make the popular measures to help people start a family, such as the CSOK Plus and the Rural CSOK loans, and the baby expecting subsidy, available to even more families.

 Family Tax Benefit to Be Doubled

Prime Minister Viktor Orbán announced in a speech in Tusnádfürdő in July this year that the family tax benefit would be doubled over the next two years, potentially affecting around one million households.  Introduced on 1 January 2011, the family tax benefit, which is also available after foetuses from the 91st day of pregnancy, 10,000 HUF per month for one child, 20,000 HUF for two children and 33,000 HUF per month for three or more children. From 2014 it can be validated from personal income tax, pension and health insurance contributions, and from July 2020 from labour market contributions. The doubling of the family tax benefit is intended to encourage childbearing and compensate for the rising cost of living, as it will leave parents with significantly more money in their pockets. Although the exact schedule and date of the increases are not yet known, financial institutions estimate that doubling the family tax benefit would increase the amount of money left with families from 120,000 to 240,000 a year for one child, from 480,000 to 960,000 for two children and from 1.188 million to 2.376 million for three children.

The new measures are a great example of how the Hungarian government always adapts the elements of the family support system to the real needs of families. Measures adjusted to new needs will help tens of thousands of families, while the doubling of the family taxation will result in a significant increase in income for all working parents.

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