It is the Government’s priority to support families. To this end, new measures have been introduced in the past month, which aim to support families with children. With these steps, the Government aims to encourage Hungarians to have more children and mothers to have more children within a shorter period of time.
From 2 December baby bonds can be purchased at the Hungarian State Treasury’s local offices and 10 regional offices. The Government is supporting the opening of an account and the purchase of the baby bond through tax exemption, extra interest and state subsidies. The renewed bond is a Government security with a tenor of 19 years and a face value of 1 forint which can be purchased in any amount.
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The new baby bonds facilitate significantly flexible and simpler savings than other securities, since parents can also contribute to it with smaller amounts. It is also a practical novelty that interest is automatically re-invested and the parents do not have come decide on this on every occasion. The money accumulated on the account may be withdrawn by the child after his/her 18th birthday and is also tax exempt.
Beginning in 2014, the childcare allowance extra scheme, which will affect more than 65 thousand people with additional extended tax and social contribution allowances worth 50 billion forints, will also provide further assistance to families. Together, these two measures provide additional support to Hungarian families with approximately 70 billion forints.
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In Hungary, childcare allowance (GYED) is received by families until the child becomes two years old, parallel to which the mother also receives a pension contribution. After this period, childcare benefit (GYES) may be claimed until the child’s third birthday. The current amendments introduce the following changes:
• Mothers who decide to return to work after their child’s first birthday, including full-time employment, will remain eligible for both childcare benefit and childcare allowance.
• From 2014, the childcare subsidies will be multiplied by the number of children eligible, as opposed to the previous system where parents could only claim one form of support at a time irrespective of the number of children under 3 years of age.
• Until now, students with no work-related income were only eligible for childcare benefit, but from 2014 they can also claim childcare allowance, as if the mother was earning a minimal wage.
• For mothers with three or more children, the current three-year social employer's contribution allowance introduced within the Job Protection Action Plan will be extended by a further two years. As a result, employers will only have to pay 50% of contributions in relation to such employees in the fourth and fifth year.
(Ministry for National Economy)
