Living in Hungary

8/6/2019 Living in Hungary

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Full country name

Area

Time Zone

Population

Capital City

People

Language

Religion

Government

Currency

Major Industries

Major Trading Partners

Republic of Hungary

92966 sq km

GMT+1hr

10.1 million

Budapest

89.9% Hungarian,

4% Roma, 2.6% German,0.8% Slovak, 0.7% Romanian

Hungarian

68% Roman Catholic,21% Reformed (Calvinist) Protestant,6% Evangelical (Lutheran),5% other

Parliamentary democracy

Hungarian Forint (HUF)

Mining, metallurgy, agriculture,construction materials,processed foods, textiles,chemicals (especially pharmaceuticals)and motor vehicles

Germany, Austria, Italy, Russia


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Moving of goods

The Act of Customs (CXXVI. of 2003.) con-tains harmonized regulation with the rules

of the European Union.These are as follows

a) Regulation No 2913/1992 of the European

Council,

b) Regulation No 2454/1993 of the European

Commission on the Execution of Regula-

tion No 2913/1992 of the European Coun-

cil,

c) Regulation No 918/1983 of the European

Council,

d) Regulation No 2658/1987 of the European

Council.

According to Regulation No 918/1983 of theEuropean Council moveable property im-ported or forwarded into Hungary by thoseliving outside of the Community and fur-

nishing a second home in Hungary may befree of any duties. The property must be fordomestic purpose and in the ownership ofthe person for at least six months before themove and must be quantitavely and consid-ering the nature suitable for furnishing thesecond home.Property for the purpose of domestic meanspersonal properties, clothes, furniture and

equipments.

Moving of animals and plants

Moveable property imported or forwardedinto Hungary by those living in the area of theEuropean Community may be free of any du-ties if that property is inheritance. But thereare two exceptions from these rules: that the

quantity of cattle stock exceeds the usualfamily requirement and the stock of agricul-tural products.

Moving of financial assets

Transfer of financial goods is largely deter-mined by the regulations on the free move-

ment of capital. In the process of accession tothe EU, Hungary has gradually implementedthe free movement of the foregoing capitaltransfers. Liberalisation has thus been imple-mented, i.e. the following financial goods areallowed to move freely: direct investment in enterprises, winding up

and relocating home such investment, and

free movement of profit arising from such

investments;

unlimited movement of capital and pay-

ments between persons with permanent

residence in the Community and in Hun-

gary;

full freedom in respect of foreign currency

operations (rights to contracts, e.g. opening

accounts, with credit institutions).

A temporary breach of the principle of freemovement of capital exists in two areas, interms of EU citizens acquiring ownershipof arable or productive land, and in respectof acquiring a secondary residence. The EUMember States accepted that Hungary couldmaintain its ban on foreign citizens and en-terprises with legal personality acquiring

ownership of arable land for seven years fol-lowing accession. This means that the abovepersons may not acquire ownership rightsto arable land. Hungary was also granted afurther five-year temporary exemption fromapplying Community law in respect of a sec-ondary residence.

Useful links: :Ministry of Finance : : www.p-m.hu


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The driving licence

Driving licences issued in all EU MemberStates shall be deemed to comply with Hun-garian legal regulations. No naturalisationprocedure is required for driving licences inthis case. Should a foreign citizen request the

naturalisation of a foreign driving licence, thisshall be completed without any obligation totake an examination.

Registration procedures,

residence permit

Foreigners shall give notification of their ac-commodation in Hungary within three work-ing days of their arrival, by providing the fol-lowing data: identification data for natural persons;

citizenship;

data identifying passport document;

accommodation address;

start and expected final date for use of the

accommodation;

identification number of the residence per-

mit.

If the accommodation is not commercial ac-commodation or accommodation maintain-ed by a legal entity, the notification obliga-tion shall be performed in person by theforeigner or the accommodation providerto the competent area authority responsiblefor policing foreigners for the accommoda-

tion. The notification obligation may also beperformed directly or by means of the com-petent settlements (or district of Budapest)local government registrar for the accommo-dation.

The general regulations on foreigners travel-ling to and residing in Hungary shall be ap-

plied, with defined variations, to EEA citizensand their family members travelling and re-siding here.

Citizens of EEA countries may travel to Hun-gary without a visa, with a valid passport orvalid personal identity card. They may re-side on the territory of the country withoutany further permits for a period of no morethan 90 days. Stays of longer than 90 days

do not require a visa, however a residencepermit shall be requested in person on theprescribed form. The residence permit veri-fies that the holder enjoys residencyor settle-ment rights on the territory of the Republicof Hungary. Accompanying family membersalso require a residence permit, which thefamily member shall be granted by means ofthe EEA citizen, as a derivative right.

Foreigners shall prove the existence of full-scale, all-risk health insurance for the entireperiod of residence in Hungary, by means ofdocuments.The period of validity of the residence permitshall be two years, which may be extended.

Special cases in the event of residency directed at working

or practising other incomeearning activity

for a specified period, the authority may re-

strict the period of validity of the residence

permit to the period of work or practice of

the activity;

if an unemployed or job-seeking EEA citizen

wishes to come to Hungary for the purpose

of employment, the authority shall deter-mine the period of validity of their residence

permit such that it may not exceed six

months;

the period of validity for studentsresidence

permits shall be the period of study, or con-

duct of professional practice, and in the

event of a longer study period shall be one

year, which may be extended.


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Procedural authorities

Office for Immigration and Citizenship (Bu-dapest, 11th District, Budafoki t 60.) and itsregional agencies, border guard authority

responsible for policing foreigners, foreignrepresentative authorised to issue visas, andthe Ministry of Foreign Affairs.

Useful links

: :Ministry of Foreign Affairs: : www.kulugyminiszterium.hu


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Recruitment

Employment agency activity in Hungary isconducted by the State Employment Serviceand private employment agencies on the

basis of conditions specified in legal regula-tions.

Information related to the service is availableon the SES website, where current job vacan-cies may be viewed. Also the list of registeredprivate employment agencies and those hir-ing labour can be found on the SES website. The EURES (European Recruitment Service)agency system is also directly available fromthe SES site, where information is available onunfilled vacancies in Hungary.

The agency service of SES is free of charge toboth employers and jobseekers. Anyone con-ducting private employment agency activitymay not claim charges or costs from jobseek-

ers.

Applications

Professional CVs, largely complying with CVnorms employed in other countries in Europe,are usually typewritten and, where required

in the advertisement, completed by hand.The entire CV should be no more than oneor two pages long and should always includethe following details: Personal data

Educational qualifications (chronological or-

der, starting with the most recent)

Courses (chronological order, starting with

the most recent)

Workplaces (chronological order, starting

wit the most recent)

Computer skills

Language skills, driving licence

Hobbies, leisure activities

A letter of motivation, addressed to the or-ganisation advertising the post or the poten-

tial employer, contains important data notincluded in the CV. The letter of motivationshould be no more than one page long and,unlike the CV, should always be signed.It is also worth giving references, possibly forwork of which the applicant is proud, or thoseable to give an objective, but positive pictureof the applicant. When providing such refer-ences, the applicant should speak to the rel-

evant person in advance, to ask whether theycould be quoted on the CV, including theirtelephone number, position and companyname.

The applicant should always attach docu-ments proving qualifications necessary tothe line of work and copies of language exam

certificates with the application.


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Recognition of diplomas

and qualifications

Recognition of the level of qualifications cer-tified by advanced diplomas and of the spe-cialist training certified thereby is the task ofthe Hungarian Equivalency and Information

Centre (HEIC), while naturalisation of scien-tific grades is performed by the domesticuniversities.

Recognition of certificates or diplomas maybe requested by anyone domiciled in Hunga-ry. In addition, the applicant shall verify his orher citizenship by means of a personal identi-ty card, passport or driving licence. However,anyone applying for recognition for the pur-pose of further study or inclusion of partialstudies need not be domiciled in Hungary.

Separate rules refer to the recognition of di-plomas verifying specialist training acquiredabroad as a general medical practitioner,dentist or chemist: recognition is only possible in the event of

university qualification;

a professional examination shall always betaken, which is subject to charges;

decisions taken by a professional commit-

tee;

other additional conditions may apply.

Useful links

: :Hungarian Equivalency andInformation Centre HEIC: :

www.ekvivalencia.hu


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Conclusion of employment contracts

The regulations governing employment

can essentially be found in the following

Law XXII of 1992 on the Labour Code con-

tains the most important guaranteed regu-

lations in respect of employment.

Regulations more beneficial to the emploeemay be established in the collective cotract,

or in the absence thereof, by agreement be-

tween the parties.

The legal effect of law XXIII of 1992 on the

Legal Status of Public Officials (Public Offi-

cials Act) extends to public administration

agencies, offices of local government rep-

resentative bodies, and county/Budapest

public administration offices or agencies in

a legal relationship with such (only Hungar-

ian citizens may be public officials).

Law XXXIII of 1992 on the Legal Status of Pub-

lic Employees contains the third element of

differentiated regulation, extending to the

legal relationship of those employed at bud-

getary institutions.

In addition to these three legal relationships,Hungarian law recognises three other atypi-cal forms of employment. These are distanceworking, working from home, and borrowinglabour.

Employment is entered into by means of acontract of employment. The contract of em-

ployment shall be compiled in writing andshall contain the following elements: names and titles of the parties;

agreement on the employees job description;

agreement on the basic wage,

agreement on the location for completing

work.

Other matters may also be agreed up-on (e.g.trial period, period of notice, grounds for ex-ceptional notice, provisions over and abovewages, cost bearing, etc.).

Employment may be established for a fixed

or indefinite period. In the absence of anagreement to the contrary, the employmentshall come into being for an indefinite period.The fixed period, including establishing newemployment, may not exceed five years. Theparties may transform or amend the contrac-tual period. Even without agreement, thecontract of employment may change from afixed to an indefinite period if the employeecontinues to work, with the knowledge of thedirect manager, for at least one day followingthe expiry of the term.

A trial period may be specified in contractsof employment for fixed and indefinite peri-ods. The trial period shall be 30 days. Collec-tive agreements or other agreements may be

made by the parties to the contrary, but a trialperiod may not last more than three months.Extension of the trial period is prohibited.During the trial period, either party may ter-minate the employment with immediate ef-fect, without giving reasons.

The employee may be employed by severalemployers simultaneously. The employee is

obliged to notify the employer if, during theperiod of employment, he or she enters intoother employment or another legal relation-ship aimed at completing work (e.g. mandateor contractorslegal relationship). Based onsuch notification, theemployer mayacknowl-edge the completion of work, but may alsoprohibit such, if it damages the employers

rightful economic interest.


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Remuneration

The right to get minimum wage for employ-ees working in Hungary is guaranteed bythe Labour Code. The compulsory minimumwage due to employees and the scope of itseffect shall be determined by the Govern-

ment. A regular review of its level shall bemade. The degree of regularity of such reviewdepends on the speed of change in econom-ic circumstances. In general, the amount shallbe reviewed annually.

As of January 1st, 2006, the amount of mini-mum wage applying for monthly pay is62500 HUF, weekly pay is 14400 HUF, dailypay is 2 880 HUF and hourly pay is 360 HUF.

The amount of minimum wage is not char-ged by income tax. Social insurance and la-bour market contributions of employers andemployees must be paid according to thegeneral rate.In specified cases, the employee shall also

be entitled to supplementary wages which,in the absence of an agreement to the con-trary, shall be calculated on the basis of theemployees basic wage.

By law, the employee is entitled to

a night-time supplement (15%);

a shift-work supplement

(afternoons - 15%, nights - 30%);

an overtime supplement(50%, or the equivalent time in lieu);

a supplement paid in return for work com-

pleted on weekly rest days or bank holidays

(50% and a day off, or 100% including atten-

dance charge on bank holidays);

a supplement due for stand-by (25%).

The collective agreement or agreementsmade between the parties may agree on ad-ditional supplements.

Working time

According to the Labour Code, full-timework involves eight hours work a day or 40hourswork a week. Regulations on employ-ment or agreements between the partiesmay establish a shorter or, for lines of work

that have a stand-by nature either fully or inpart, longer working hours, but not in excessof 12 hours a day, or 60 hours a week.

Annual leave

Employees shall be entitled to regular leavein each calendar year in which they are em-ployed, serving to assist in rest and recupera-tion

Regular leave consists of basic and extra holi-days. Basic holidays depend solely on the ageof the employee. Employees are first due lon-ger basic holidays in the year in which theyreach the specified age.

Basic holiday entitlement is as follows

up to the age of 25: 20 working days; from the age of 25: 21 working days;

up to the age of 31: an additional working

day every three years;

up to the age of 45: an additional working

day every two years;

from the age of 45: 30 working days.

The law does not exclude the possibility of

the employer granting employees more ba-sic leave than that specified by law, under acollective agreement or contract of employ-ment.


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The law defines the following three com-pulsory cases for unpaid leave:1. Pregnant women or women giving birth

are entitled to 24 weeksmaternity (un-

paid) leave. For the time of maternityleave, they shall be entitled to pregnancyand confinement benefit from the socialinsurance fund. At the request of the em-ployee, unpaid leave may be taken forthe purpose of childcare until the childreaches the age of three, or the age of14 in the event of a child suffering long-

term illness or having a serious disability.Childcare benefit is due for the period ofcaring leave.

2. Upon request, the employee is entitledto unpaid leave if he or she looks after orcares for a close relative requiring long-term (expected to exceed 30 days) care

or nursing. This period may not be morethan two years. The local governmentregistrar for the settlement may establishpayment of a nursing fee to the personon caring leave for such a period.

3. The employee shall be allowed unpaid-leave of up to one year if building a housefrom his or her own resources. Entitle-

ment to unpaid leave is due to the em-ployee named in the building permit ora spouse (partner) living with him or her.


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Leave (sickness, maternity etc.)

For periods of earning incapacity due to illness,employees are entitled to 15 dayssicknessleave per calendar year. Sickness leave enti-tlement is due to employees over and aboveregular leave. Days not taken in the relevantyear may not be claimed at a later date. Sick-ness leave of 15 days is due to employeeswho were in employment over the entirecalendar year. It may be taken in several partsor entirely in one go. The employee may onlybe entitled to sick pay from the sixteenth day.

Employees are also entitled to sickness leaveunder other employment relationships, and ifemployed part-time or as pensioners.

If the earning incapacity arises as a result of anindustrial accident or occupational disease,the employee shall receive accident sick payand shall not be entitled to sickness leave.

The employee shall receive remuneration forthe period of sickness leave, to be funded bythe employer. The amount thereof shall be80% of the attendance fee. Sickness leave isalso due for one calendar year. As a result,in the event of an employment relationshipcommencing during the year, the employeeshall be entitled to the pro rata share of sick-

ness leave due for the calendar year. How-ever, if the employee was employed duringthe course of the year, such share shall not ex-

ceed the share of sickness leave not yet takenfor the calendar year. This regulation relatesto the fact that upon termination of employ-ment, the certification issued to the employ-ee shall contain the period of sickness leavetaken by the employee in the year of termina-tion of employment. Sickness leave, similarlyto regular leave, may be taken for workingdays under the schedule of work.

Pregnant women or women giving birth areentitled to 27 weeks maternity leave, which

shall be issued such that four weeks thereofshould be taken before the expected date ofbirth.Pregnancy and confinement benefit is duefor all periods of maternity leave on the basisof the employees social insurance coverage,which accounts for 70% of the employeesaverage daily salary.

Leave for having childrenThe employee is entitled to unpaid leave for the purpose of caring for a child up to

the age of three;

until the child reaches the age of 14, for the

purpose of childcare if the employee re-

ceives childcare benefit;

until the child reaches the age of 12, in order

to look after a child with an illness at home.


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End of employment

Employment may be terminated

by mutual agreement between the em-

ployer and employee;

by regular notice;

by exceptional notice;

with immediate effect during the trial pe-riod.

By law, fixed period employment may onlybe terminated by mutual agreement, or ex-ceptional notice, or with immediate effectin the event of stipulation of a trial period.The employer may terminate the employeesfixed period employment contrary to theforegoing provision. However, the employeeshall then be entitled to one years averagesalary and, if the remaining time of the fixedperiod is shorter than one year, he or she shallreceive the average salary for the remainingperiod. Agreements or declarations directedat terminating employment shall be madein writing. Any deviation from the foregoing

shall be invalid.

Mutual agreement shall be established be-tween the employer and employee. Both theemployer and employee may terminate em-ployment for an indefinite period by servingregular notice.

Notice shall be given in writing. Notice takes

effect upon delivery to the relevant party. Theemployer shall be obliged to give reasons forserving notice, which reasons shall clearly in-dicate the cause of such notice.

The grounds for notice may only be groundsrelated to the employees capabilities or con-duct in respect of employment or the em-

ployer

s operations. The employer may givenotice without reasons if the employee hasobtained entitlement to old age pension or

is in receipt of an advanced old age pensionor service pension. The law does not containany restrictive provisions for regular noticeserved by the employee.

The employer may generally exercise regular

notice at any time. However, serving notice isexcluded in the event of notice prohibition,and serious grounds for notice are required inthe event of restrictions on notice.

The notice period lasts for at least 30 days, butmay not exceed one year. Such notice periodbecomes longer according to the time spentin the employment of the employer. In theevent of regular notice, the employer shall beobliged to exempt the employee from com-pleting work. This shall cover half the periodof notice, though in the event of provisionthereof in a decision taken at the discretion ofthe employer, or in the collective agreementor contract of employment, the notice periodmay exempt the employee from carrying out

work for the entire period. Regular wages aredue for the period of notice spent in work,and average salary is due for the period notspent in work.

Severance pay relates to the employer ter-minating employment by serving regularnotice. The employee shall also be entitled tosuch if the employer is terminated without a

legal successor.A further condition for severance pay is thatthe employee was employed by the employ-er for at least three years.

The employee is not entitled to severancepay if he or she is classified as a pensioner bythe time of termination of employment at

the latest.


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The collective agreement or contract of em-ployment may determine severance pay in amore favourable amount than the level de-fined by law.

The essential difference between ordinary

and extraordinary notice is that, in the caseof the latter, employment is terminated afternotice has been served. Both the employerand the employee have the option of termi-nating employment for the following speci-fied reasons: if the other party breaches a material obliga-

tion arising from the employment intention-

ally, or by gross neglect, or

otherwise exhibits conduct rendering the

continuation of employment impossible.

During the trial period, either party may ter-minate the legal relationship with immediateeffect without giving reasons.

Occupational risks

Supervision of labour affairs is performed bythe supervisors of the county boards of theNational Employment Safety and LabourBoard, who examine the observance of regu-lations on completion of work.

The provisions relating to employment pro-tection are contained in law No. XCIII of 1993. The stipulations of this law shall be applied

to all organised work (employment, publicemployees legal relationship, public servicelegal relationship), and to students and pu-pils relationships in the course of practicaltraining, and so on.

The law also contains obligations for employ-ers and employees in respect of employment

protection.

The employer shall ensure conditions for safework not posing a danger to health. The em-ployer may not replace performance of thesecriteria by paying the employee financial orother rewards.

Representation of workersIn order to protect employeeseconomic andsocial rights and enforce their interests moreeffectively, they are entitled to form and op-erate organisations to represent their inter-ests. The two relevant forms are trade unionsand works councils.

Work disputes - Strikes

The employee may initiate labour law dis-putes to enforce demands originating fromhis or her employment. In addition, tradeunions and works councils may initiate legaldisputes to enforce claims arising from theLabour Code, the collective agreement orworks agreements. Labour law disputes shallbe conducted in court. Labour courts operate

in all counties and in Budapest. The petitionshall be submitted to the competent labourcourt for the registered seat of the employer.

Employees are entitled to strike to safeguardtheir economic and social interests, pursu-ant to the constitution and the Strikes Act.Participation in strikes shall be voluntary,and nobody may force participation therein

or abstention thereof. Coercion may not beused against workers participating in lawfulstrikes with the aim of ending the suspensionof work

Useful links

: :Ministry of Employment and Labour: : www.fmm.gov.hu

: :Public Employment Service: :www.afsz.hu


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The political, administrative

and legal system

Hungary has been a republic operating asa democratic constitutional state since 23

October 1989. The constitution, acts and awhole series of lower-level legal regulationsguarantee the predominan-ce of rights un-der the law of continental Europe. Legalregulations comply with international norms,and Hungary is a member of the UN, and ofthe European Union, with effect from 1 May2004, as well as a participant in all major inter-national conventions.

The legal system is hierarchical, i.e. lower-level legal regulations have to comply withhigher-level laws. The Hungarian legal systemis founded on written legal regulations anddoes not recognise case law.

Hungarys public administration is divi-ded

into 19 counties and the capital city; whileBudapest is broken down into 23 districts.The major units of public administration areBudapest, the counties, cities and villages. Incompliance with the requirements of the Eu-ropean Union, seven planning and statisticalregions (Central Hungary, Central Transdanu-bia, West Transdanubia, South Transdanubia,North Hungary, North Great Hungarian Plain,

South Great Hungarian Plain) have beenformed in Hungary, fully covering the coun-ties, and county and regional developmentcouncils have been established.Following the social and political changes(after 1989), a multi-party system was formedin Hungary. Anyone is free to form a party incompliance with the Political Parties Act.

Parliamentary elections take place every fouryears, with the most recent being in spring2002. Since the social and political changes,parliamentary elections have always been ac-

companied by a change of government. Theelection system rests on two pillars: represen-tatives can be voted into Parliament individu-ally and on party lists, and citizens are thusentitled to vote for party lists and individualcandidates. Local government elections areheld in the same year as parliamentary elec-tions. Only parties receiving at least 5% of thevote at the election gain access to Parliament.The President of the Republic calls upon thecandidate from the winning party to form agovernment.

After the 2002 elections, the most significantparties playing a role in political life were thefollowing: Fidesz - Hungarian Civil Party: a conservative,

right-wing party; Hungarian Democratic Forum: Christian

conservative, right-wing party;

Hungarian Socialist Party: party representing

social, left-wing values;

Alliance of Free Democrats, liberal party

Useful links

: :Ministry of Justice: :

www.im.hu : :Government portal: :

www.magyarorszag.hu : :Various information about Budapest: :

www.budapest.hu : :Homepages of the

Hungarian political parties: : part.lap.hu

: :About politics: : politika.lap.hu


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Taxes and charges on labour

The following items are deducted from the

gross income of private individuals

8.5% private pension fund contribution;

0.5% social insurance contribution;

4% health care contribution;

1% employee contribution; personal income tax.

The regulations of conventions on avoidanceof dual taxation primarily govern taxationof income originating from employment inHungary of foreign private individuals. The conventions excluding dual taxationspecify in which of the two contracting statesthe individual types of income may be taxedand also stipulate how dual taxation shouldbe avoided in respect of incomes that couldbe taxed in both countries. As a result, whereno convention exists on avoidance of dualtaxation with the given state, it is possiblethat the taxpayer will have to pay tax in twostates on foreign income and assets.

If, under the convention, income is taxablein Hungary, the provisions of law No. CXVIIof 1995 on Personal Income Tax shall be ap-plied, with certain special provisions in re-spect of foreigners. The primary differenceis that the tax obligation is only incumbentupon foreign private individuals for incomeearned in Hungary.In respect of taxable incomes in Hungary, tax

liability shall encumber foreign private indi-viduals pursuant to domestic tax regulations.Hereunder

the employer shall deduct a tax advance

from the employees wages,

the employee shall submit tax returns on

domestic incomes earned in the given year

and on the personal income tax thereon, or

tax may be determined by the employer onthe basis of a passport number, as a tax iden-

tifier.

Where the legal conditions are fulfilled, theforeign private individual is also entitled toall tax allowances allowed for under the Per-sonal Income Tax Act (e.g. tax credits).

Tax advances payable by private individuals

conducting independent activity shall be es-tablished and paid by the private individual tothe competent tax authority for the domicile. Tax advances shall be paid quarterly by the12th day of the month following the relevantquarter. In determining the tax advance, in-come shall be calculated from the beginningof the year until the end of the given quarter,and the amount of tax shall be calculated onthe basis of the schedule of taxes. Advancesalready paid shall be deducted from amountsthus established, and the difference shall bepaid as the relevant quarterly advance.

Sole entrepreneurs may choose fixed lumpsum taxation or tax payment on entrepre-neurial income. Sole entrepreneurs choos-

ing fixed taxation shall pay the tax advanceby the 12th day of the month following therelevant quarter, which amount shall be thedifferential between the fixed tax on incomecalculated from the start of the year and taxadvances already paid.

Useful links

: : National Health Insurance Fund: :

www.oep.hu : :Ministry of Finance: :

www.penzugyminiszterium.hu : :Ministry of Finance

www.p-m.hu : :State Tax Authority: :

www.apeh.hu


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Incomes and cost of living

The number of people employed In Hungarywas 3,932,000 in 2005 (the total population isslightly below 10 million). However, the num-ber of unemployed was 308,000, represent-

ing an unemployment rate of 7.3%. However,it should be noted that the unemploymentrate is even lower in the western part of thecountry, while due to unfavourable econom-ic indicators in the eastern counties, the rateis several times higher than the average.

Gross average income for 2005 was HUF154 600, but a difference also appeared be-

tween the eastern and western counties inthis respect: incomes are higher in the eco-nomically more developed Transdanubiaregion of the country, with Budapest thehaving the highest incomes. The income ofthose employed in intellectual professionsgenerally exceeds that of physical work-ers, and the worldwide difference between

the salaries of men and women is also no-ticeable, as a result of which women in themajority of cases receive lower wages than

men for the same work. The so-calledEqualOpportunitiesAct, which prohibits discrimi-nation between the sexes, is aimed at takingaction against such differences.

The government defines the amount of theminimum compulsory wage each year (in theevent of an eight-hour working day in 2006,HUF 62500 a month), as well as the minimumpension.

Useful links

: :Public Employment Service: :

www.afsz.hu : :Ministry of Employment Policy and

Labour Affairs: :www.fmm.gov.hu

: :National Pension Insurance Directorate: :www.onyf.hu

: :Ministry of Health www.eum.hu : :: :Ministry of Economic Affairs and Transport: :

www.gkm.hu : :Central Statistical Office: :www.ksh.hu


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Shopping

Shopping possibilities and habits in Hungaryreveal variations in respect of the provincesand larger cities. Whereas small shops openuntil late afternoon are typical in villages andsmaller towns, supermarkets and hypermar-

kets offering a wide range of goods are nowvery popular in the large cities, where shop-pers can find anything they might need 24hours a day. Such large stores are usually builtoutside the cities, on sections of road lea-ding into the city, and attract customers withtheir huge car parks, cheaper prices and extraservices.

Food stores are generally open from 6 a.m.until 8 p.m., but non-stop stores can be foundin all cities. Smaller shops usually sell the sameproducts as large retail chains at a slightlyhigher price. Other stores (clothes, shoes, sta-tionery, gifts, furniture, etc.) are usually openbetween 9 a.m. and 5 p.m., while stores in theshopping and entertainment centres located

in large cities have longer business hours,opening until 8 or 9 p.m.

The option of payment by bank card is notalways available to shoppers in smallerstores, but this payment method is spread-ing, and the high number of cash dispensersalso helps to bridge any possible problems.Nevertheless, cash payments may still be

deemed customary.

Banks and post offices are open to the publicfrom 8 a.m. until 5 p.m., but banks close ear-lier on Fridays, at 3 p.m. In addition, post of-fices staying open late are located in all cities,including some open as late as 12 midnight.

Saturday opening of stores presents quite avariable picture: shops located in large cit-ies and shopping centres are open all day onboth Saturdays and Sundays, while smallerstores generally close at midday on Saturday

and remain closed until Monday.

It is no longer customary to close for lunchin most Hungarian shops, meaning stores areopen to the public continuously. There are in-creasing opportunities to buy by mail order,either from catalogues, over the telephone,of from stores offering such services over theInternet. This method can be used to accessa wide range of goods, including householdmachines, clothes and food. Home deliveriesare particularly popular for meals.

Buying on credit is particularly common fordurable consumer goods. Bank officials usu-ally work at larger stores, providing shopperswith on-site information on the conditions

for buying in instalments, and concludingthe contract, thereby facilitating purchase ofthe relevant product. It is usually a conditionof the loan that the shopper must show cer-tification of income from his or her employer.Larger retail stores have also launched theirown shopping cards, encouraging people tobuy on credit or using bonus points.

Useful links aruhaz.lap.hu

vasarlas.origo.hu fogyasztovedelem.lap.hu

bank.lap.hu www.posta.hu


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Accommodation

Most housing is privately owned, long-termleasing is not wide-spread in Hungary, ac-cordingly blocks of flats are not typical. Con-versely, all over the country many private in-dividuals rent out their real estate being out

of use. Real estate prices show considerablevariations depending on the environment,the approach, the condition and other fac-tors of the real estate. Prices for real estatesin good condition, built in Budapest are thehighest. It is generally held that the price forsmaller flats is comparatively higher than forbigger ones. In addition, leasing a flat in asmall town is approximately for third-quarterthe price than in the bigger cities.

Information on housing for sale and rent isavailable from individual advertising newspa-pers and real estate agents. In order to clarifylegal status, whether purchasing or rentinghousing, it is advisable to look at the own-ership deed for the given real estate, which

contains public data in respect of the ownerof and encumbrances on the real estate, andmay be applied for at the competent landregistry office.Saleandpurchaseofrealestateis only valid, if it is incorporated in a contractcountersigned by a lawyer or public notary,and the contract is submitted to the com-petent land registry office for the purpose ofregistering a change of ownership rights.

In the event of buying a house or flat, the fol-lowing public utilities shall be responsible forprocedures and require notification of data: regional electricity service providers (speci-

fied company provides electricity in the

given location, the market is not liberalised); regional gas works (same situation as for

electricity providers);

local water works.

Monthly fees shall be paid for such serviceprovision. Fees are generally paid on the ba-sis of a fixed lump sum, with accounts settledannually. When using such services, contractsshall also be concluded with the following or-ganisations: telephone company (the communications

market is liberalised, meaning there is a free

choice of service providers),

cabel television service provider (also liber-

alised).

Useful links www.ingatlan.com

www.ingatlan.lap.hu lakas.lap.hu

www.alberlet.hu www.alompalota.hu

www.ingatlankereso.hu www.degaz.hu

www.demasz.hu

vizmu.lap.hu www.matav.hu

kabel.lap.hu


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The cultural and social life

There are considerable opportunities for en-tertainment and relaxation in Hungary. Sincethe social and political changes, a wider vari-ety of programmes and leisure opportunitieshave become available, primarily in the cities.In addition to one-off programmes, there arealso annual large-scale events, such as theTisza Lake Festival, the Kapolcs Artists Valley,Budapest Spring Festival or the Island Festival

for young people, which primarily offers mu-sical programmes. The various restaurants, pubs and cafs fre-quently offer cultural programmes (readings,discussion evenings), thereby linking culturalrelaxation to a conversation without any com-mitments. In addition to cinemas primarilyshowing mainstream films, there is also an artcinema network, where interested viewers

can watch artistic films. These are generallyless modern, though cheaper than the multi-plexes. The state also subsidises the produc-tion of Hungarian films. There are opportuni-ties to visit theatres in all cities, though mostare based in the capital city, which also offersthe widest selection in terms of the numberof plays. The Budapest Opera House offers re-

laxation opportunities to lovers of this genre,and its artists are recognised throughout theworld.

All cities offer sporting opportunities: a vari-ety of sports can be pursued at various sportsfacilities and fields, and the option of practis-ing unusual, extreme sports exists in largercities. Internet sites of certain institutions andsettlements, and magazines recommendingprogrammes provide information on leisureevents.

Useful links: : Leisure www.est.hu : :

: :Culture www.kultura.lap.hu : :: :Sport www.magyar.sport.hu : :

: :Opera www.opera.hu : :: :Theatre www.szinhaz.hu : :: :Newspapers ujsag.lap.hu : :

: :Hungarian values, cultural programmes : : www.vendegvaro.hu

: :Homepage of the Ticket Express : : www.tex.hu

: :Restaurants etterem.lap.hu : :: :Timetables www.menetrendek.hu : :


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Transport

By virtue of its location, Hungary plays a keyrole in international traffic in Europe and hassignificant levels of both business and privatetraffic. After accessionto the European Union,Hungarys eastern and southern borders shallalso become the EUs borders, which is likelyto place increasing burdens on traffic and

transport.The countrys motorways operate using a tollsystem. Vouchers are valid for various dura-tions: four-day, 10-day, 31-day and annualmotorway passes are available.

The speeds allowed on the roads are as follows: on motorways: 130km/h;

on public highways: 90km/h;

in built-up areas: 50km/h.

Major discounts available on trains and buses: children aged under six travel for free;

those holding student identification cards

receive a 67.5% discount;

those aged under 26 are entitled to a 33%

discount; (only on trains)

those living with a disability and peopleaccompanying them are given a 67.5% dis-

count;

pensioners can travel at 50% cost, up to 16

times a year;

travel over the age of 65 is free of charge;

service providers may also specify further

group allowances and allowances linked to

certain events.

Local public transport can also be used in thecities. Buses are available in most cities, whiletrams run in Budapest, Szeged and Debrecen.Budapest also has three metro lines, as wellas trolleybuses. Prices of local city transportare proportionately higher than long-dis-tance transport (a single ticket valid for anymeans of public transport costs HUF 185 inBudapest, as at February 2006).

Useful links

: :Ministry of Economy and Transport: : www.gkm.cov.hu

: :About Hungarian motorways: : www.autopalya.hu

: :Hungarian Airlines www.malev.hu : :: :Hungarian State Railways www.mav.hu : :

: :Buses and schedules www.volan.hu : :


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The Hungarian education system

Children in Hungary may attend crches,where they are looked after in small groupsunder full or half-day supervision, until theage of three.From the age of three, small children may at-

tend nursery schools until such time as theyattend school, and before school registra-tion, they shall be obliged to attend nurseryschool courses for one year.In larger settlements, parents are gener-ally able to choose between several types ofnursery school, as in addition to traditionallocal government nursery schools, nurseriesrun by churches or foundations are also avail-able. There are also various nursery schoolsbased on learning methods, for example in-stitutions specialised in language training orsporting activities.Children in Hungary reaching the neces-sary level of development to be admitted toschool are subject to compulsory educationfrom the calendar year in which they reach

the age of six on or before 31 May. Upon pa-rental request, children may also be subjectto compulsory education if they reach theage of six on or before 31 December. Com-pulsory education lasts until the end of theacademic year in which the student reachesthe age of 18.

The official teaching language in all educa-

tional institutions is Hungarian. However,there are also schools that teach in variouslanguages of nationalities living in Hungary,where some subjects are taught in foreignlanguages.There is a wide range of both primary and sec-ondary schools, and a great many specialisededucational institutions providing students

with greater and deeper knowledge, andgreater opportunities in certain areas. Forexample, Hungary has schools specialising in

languages, branches of science or sport, andso-called alternative schools, which train andeducate children based on methods at vari-ance from the traditional Hungarian educa-tion system.

The academic year begins in the last week ofAugust or the first week of September, andlasts until the middle of June.During the summer break of around two anda half months, most schools organise campsand training sessions for students. Teachingtakes place within the framework of 45-min-ute lessons at all levels up to and includingsecondary schools, and such lessons are sep-arated by breaks of 10 minutes. Students inprimary school have on average five lessonsper day, those in secondary school six. Pri-mary schools provide an afternoon service,when trained teachers look after children af-ter lessons have finished.

School studies may be divided into severalstages: the traditional arrangement is for students to

progress to a four-year secondary institution,

having completed eight years at primary

school (8 + 4 years);

they can now do so after four or six years,

provided they continue studies in a

grammar school (4 + 8, or 6 + 6 year system).

The following secondary education institu-tions exist: grammar school

(provides general education);

specialist secondary school

(in addition to general education, also pro-

vides a specialist qualification);

vocational school(provides professional qualification, places

great emphasis on practical training).


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The highest level of qualification achievableat secondary school is the school-leavingexam, which consists of compulsory and op-tional subjects (compulsory subjects includemathematics, history, Hungarian languageand literature, or any foreign language). The

school-leaving exam is a compulsory condi-tion for further study in a higher educationinstitution.There are two types of higher education in-stitution in Hungary: college (no more than four years),

university (usually five, sometimes six years).

Further information on higher education in-stitutions is available on their websites. Studyin state educational institutions and the ac-quisition of the first diploma in higher edu-cation institutions is free of charge. However,church-run and other non-state schools mayask for tuition fees for their services.

Nursery schools and primary schools are lo-

cated in almost every settlement in the coun-try, while secondary schools are only foundin towns and cities, and higher education in-stitutions are only in the larger cities. Schoolsmay hold entrance exams within the frame-works of legal regulations to select futurestudents. However, this is only customary forrenowned and popular secondary schoolsand higher education institutions. Should an

entrance exam be required, the school shallprovide official information to those seekingadmission on the conditions for entry to theschool. Secondary schools hold entrance ex-ams in the spring, higher education institu-tions in the summer, after the academic yearhas ended.

Life-long learning made unavoidable by rap-idly changing economic requirements, as-sociated labour market changes and almost

universal career changes, has put adult train-ing into the spotlight. As a result, evening,correspondence and distance learning pro-grammes are especially popular in secondaryand higher education.

Useful links: :Ministry of Education; Hungarian

Equivalence and Information Center: : www.om.hu

: :On higher education and entrance exams : : www.felvi.hu

: :Portal on LearningOpportunities Throughout Europe: :

europa.eu.int/ploteus

Private life (birth, marriage, deaths)

Childrens births are registered in the compe-tent settlement for the place of birth.Registration in the register of births takesplace upon notification, on the basis of theminutes recorded thereof. In the event ofbirths in hospitals or other health care institu-

tions, the institution performs such notifica-tion. The birth certificate contains the dataof the child and parents, and designation offoreign citizenship, where applicable. Afterregistration in the register of births, the reg-istrar issues an extract from the register freeof charge, which contains the childs mostimportant personal data (name, sex, placeand time of birth, name of parents and any

comments). Such extracts from the registerof births are required in various official proce-dures throughout our lives.

Cases of death shall be entered into the reg-ister of deaths in compliance with the placeof death, on the basis of the minutes thereof.After registration, the registrar issues an ex-

tract from the register of deaths to a closerelative free of charge, containing the name,sex and family status of the deceased, place


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and time of death, name of parents, and anyother comments. An extract from the registerof deaths must be shown, inter alia, in exer-cising wills and, in the event of membershipof a company, before the court of companyregistration.

Marriages may be conducted in front of theregistrar after a period of 30 daysnotificationof such intention. Marriages shall be held inpublic and in the presence of two witnesses,such that the parties jointly declare their in-tention to conclude a marriage, in front of theregistrar, and the registrar shall enter this factinto the register of marriages. A marriage cer-tificate is issued from the register, which laterserves to certify the holding of the marriage.

Under the effective legal regulations inHungary, marriage may be concluded be-tween men and women, and cohabitation ofpeople of the same sex does not entail anylegal consequences in law. However, Hungar-

ian law attaches certain legal consequencesto partner relationships between men andwomen (e.g. partners are classified as closerelatives and may acquire common owner-ship during cohabitation, in proportion totheir involvement, etc.). In addition to civillaw marriages, it is common in Hungary tohold a church wedding. This, however, unlikethe civil wedding, does not have implications

for legal consequences of family and prop-erty law and is not state recognised. Church

ceremonies may therefore only be held afterthe conclusion of a civil marriage.

The health system

Anyone who, on the basis of Hungarian orcommunity regulations, is classified as in-

sured shall be entitled to the benefits of thesystem of health care provision in Hungary.

Pursuant to the law on social insurance, ev-eryone is insured who: is an employee or has another legal relation-

ship aimed at performing work;

is a student;

is in receipt of unemployment benefit;

performs entrepreneurial activity and

clerical person.

Health insurance services are defined in lawNo. LXXXIII of 1997. Use of such services takesplace on the basis of an insurance relationship,based on the payment of a specified amountof contributions. Participation in the social

insurance system, i.e. entitlement to benefitsthereof, for Hungarian citizens, may be provedby theTAJ card(containing the relevant so-cial insurance identification code and otherpersonal data), and for citizens of EU MemberStates, by the appropriate E form.


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Health care benefits include financial

benefits and benefits in kind

I. Benefits in kind

1. In compliance with age, everyone is en-titled to participate in a variety of check-ups (e.g. free dental examinations for

children, lung and cancer screening).2. Family doctor services (general examina-

tions and advice, curative treatment, as-sessment of earning capacity, etc.) may,as per the statutes, be used at freelychosen family doctors. In the event ofthe family doctor being unavailable, thecompetent family doctor for the resi-dence may be contacted.

3. Citizens under 18 or over 60 years of ageare entitled to free dental provision and,regardless of age, everyone is entitled toa dentist focal examination.

4. In the event of illness, insured parties areentitled to examinations and curative treat-ment in the framework of specialist out-patient services, including any necessary

medicines or bandages, to specialist medi-cal opinions and care necessary for curativetreatment and in specified cases to the as-sessment of earning capacity.(The family doctor usually refers patients tospecialist examinations, but most special-ist medical consultancies can also be usedwithout this.)

5. By means of reference, or in the absence

thereof, where necessary, everyone isentitled to inpatient services (i.e. hospitalcare) and in this framework to placementin hospital, curative treatment, medi-cines, care and meals.

6. Expectant mothers may claim pregnancycare and birth services, and terminationof pregnancy in certain cases defined by

law.

7. Benefits in kind also include necessaryrehabilitation for individual illnesses (e.g.sanatorium treatment, physiotherapy,etc.) and, where necessary, patient trans

portation and emergency treatment. Allsuch services are free of charge to mem-bers of the social insurance scheme.

8. The state provides a price subsidy forvari-ous medicines, aids to curative treatmentand individual therapeutic procedures(e.g. medicinal bathing).

9. Insured parties referred to outpatientservices, inpatient institutions or thera-peutic services and rehabilitation areentitled to subsidy for travel costs. Thebeneficiary shall be entitled to subsidyon scheduled means of local transport,up to the amount of full adult fare.

II. Financial benefits

1. The insured are entitled to pregnancy

and confinement benefit for a period of24 weeks. This accounts for 70% of dailyaverage salary.

2. Child care benefit is due at the earliestfrom the day following the expiry ofpregnancy and confinement benefit (24weeks), or the appropriate period there-of, until the child reaches the age of two.Childcare benefit shall be equivalent to

70% of the average salary per calendarday. The monthly maximum amount ofbenefit is defined in the Annual BudgetAct (the maximum monthly amount for2006 is HUF 83 000).

3. Anyone is entitled to sick pay who, dur-ing the term of insurance, or on thefirst, second or third day following ter-

mination thereof, becomes incapable ofearning (due to illness or pregnancy) andpays health insurance contributions.


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Sick pay shall be due for the period ofearning incapacity, though for no morethan one year during the term of theinsurance relationship, and for 90 daysfollowing termination of the insurancerelationship. In the case of continual in-surance coverage of at least two years,

the amount of sick pay shall be 70% ofaverage income, and for shorter periodsof insurance or during periods of inpa-tient therapeutic institution services, 60%.

4. Accident benefit is due in the event ofindustrial accidents or occupational dis-ease. The injured party, in the form ofaccident benefits, shall be entitled to ac-

cident health care services, accident sickpay and an accident allowance.

Useful links

: :Ministry of Health: : www.eszcsm.hu

: :National Health Insurance Fund: : www.oep.hu


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General organisation

Hungary follows the distribution system ofdefinitions used in the European Union fromthe point of view of benefits provided and

the administrative system thereof, and thususes the following concepts: social protection;

social security;

social insurance;

social assistance.

Social protection is the widest concept, com-prising all forms of social subsidy. It rests ontwo pillars: social security benefits and socialassistance.The concept of social protection includes allforms of benefitsandservices,whetherornotthey are linked to payment of contributions(e.g. unemployment benefit), are universal,i.e. allowances based on objective rights (e.g.family supplement), or assistance based on

need (e.g. benefits subject to the effect ofsocial law and exceptional child protectionsubsidy). Social protection therefore includesall three types of benefit: benefits based oninsurance, universal benefits, and assistance,including: sickness and maternity;

handicap and disability;

unemployment;

old age benefits(pensions and pension-type benefits);

benefits for relatives;

family benefits;

social benefits.

Social security on the other hand is a morerestricted concept than social protection.

It includes allowances due in the event ofthe incidence of defined social risks (unem-ployment, industrial accident, occupational

disease, disability, old age, death, sickness,maternity, except for poverty), and which areeither related to earning activity, and thereby

payment of contributions, or are due on thebasis of objective rights, pursuant to status(e.g. citizenship) defined by law. Assistance,however, does not form part of social secu-rity. The concept of social security thus com-prises the following three types of benefit: social insurance benefits;

universal benefits based on objective rights;

special non-contributory benefits, which-

supplement or replace the benefits of the

first two groups.

The concept of social security also definesthe position of social insurance in relationto social security. Social insurance benefitsforming part of social security constitute justone group, the group of benefits only avail-

able through contribution payments. Typicalof this group are health care and pension sys-tem, or some unemployment benefits.

The concept of social assistance includes as-sistance awarded to those outside social se-curity and in basic need. The objective is tosubsidise persons without appropriate ma-terial resources. However, it is not sufficient

for the relative party to comply with a legallydefined status, for example his or her incomedoes not exceed the minimum old age pen-sion. In addition, the person or organisationawarding assistance shall also be requiredto take need into consideration, and to basetheir assessment on fairness.


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Sickness insurance

Everyone, irrespective of citizenship, is subject to the effect of compulsory insuranceand is therefore insured and entitled to makeuse of health insurance benefits from the firstday of employment.

In so far as the foreigner, in respect of his orher employment, is not classified as insured,in the absence of provision to the contrary ininternational agreements, he/she shall be en-titled to voluntarily join the health insurancescheme. He or she then has to pay relativelyhigh monthly contributions (100% of theminimum wage).

The insured (contribution payers) and thoseentitled to health care services (pensioners,students, dependent relatives) may, from thefirst day and without respect for their citizen-ship, make use of the full range of health careservices at any service having a contract withthe National Health Insurance Fund. Only

persons concluding agreements are entitledto provision contrary to the general regula-tions, however, this can be justified by thefact that they do not come under the effectof compulsory insurance, and relates not onlyto foreign citizens, but also to Hungarian citi-zens not domiciled in Hungary.

Beyond the insured and beneficiaries, or per-

sons entitled pursuant to the agreement, it isonly possible to make use of health care pro-vision in Hungary free of charge in the con-text of the regulations of international agree-ments. Persons not classified above may onlymake use of services alongside an obligationto pay. Although in the context of law No CLIVof 1997 on Health Care, emergency provision

is due free of charge, in practice this onlycovers cases of emergency ambulance treat-ment. It should be noted that the practice of

free emergency ambulance treatment is nowsubject to change, as a result of the slightlyambiguous definition of the Health Care Act.

Sick pay may be granted to insured claim-

ants who have or had insurance relationshipsand who, as a result of the illness, have beenclassified by the relevant medical officer asincapable of earning, and were also obligedto pay 3% health insurance contributions. Forthe first 15 working days of earning incapac-ity, sickness leave rather than sick pay shall bedue. Sickness leave is only due in the event ofthe employees own illness. Home workers,sole entrepreneurs, assisting family mem-bers, or members of partnership enterprises(unless they carry out work in the frameworkof employment), persons or apprentices con-ducting work on the basis of assignment, andpersons becoming incapable of earning aftertheir employment has terminated are not en-titled to sickness leave. For the period of sick-

ness leave, 80% of the attendance fee shall bedue, which is paid by the employer and formspart of tax and income subject to contribu-tions. For insured parties entitled to sicknessleave, sick pay shall be established from theday following expiry of sickness leave.

Sick pay is due for periods of certified earningincapacity from the date following the expiry

of entitlement to sickness leave for the claim-ants illness, and for no more than one year.However, sick pay is only due for one year ifthe claimant was continually insured for atleast one year directly preceding his or herearning incapacity. Several factors affect theestablishment of the amount of sick pay, pri-marily income forming the basis for sick pay.

The amount, depending on the period spentin insurance, shall be 60% or 70% of averagedaily salary.


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: : 32 : : Living and Working in Hungary32 Living and Working in Hungary

Maternity insurance

Pregnancy and confinement benefit is dueto anyone who is insured for 180 days withintwo years prior to birth, and who gives birthduring the period of insurance or within 42days following the termination of insurance,

or who gives birth more than 42 days follow-ing termination of the insurance but within afurther 28 days of the period of payment ofsick pay or accident sick pay.

Pregnancy and confinement benefit is duefor the period of maternity leave, which onthe basis of the Labour Code is 24 weeks.Four weeks of such period shall fall beforethe expected date of birth.

Pregnancy and confinementbenefitamountsto 70% of average daily salary.

Invalidity insurance

Insured persons are entitled to disability pen-sion who:a) as a result of a deterioration in health, or

physical or intellectual deterioration, have

lost at least 67% of working capacity and no

improvement is anticipated in this conditionfor one year,

b) have acquired the prescribed period of ser-

vice,

c) do not regularly work, or whose salary is

substantially lower than their salary before

the disablement.

Salary shall be deemed substantially lower if

it falls below 80% of the salary before illness.


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Old-age insurance

In the framework of compulsory pensioninsurance, in Hungary a so-called mixed sys-tem consisting of two pillars operates. Pillar Iworks by means of a pay-as-you-go systemof services, and represents a share of around

. Pillar II is a private pension system work-ing on the principle of capital funds basedon contributions and in the organisationalframeworks of private pension funds, whichprovide approx. of pension services. Thetwo pillar pension system developed in theframework of the compulsory insurance sys-tem is also supplemented by a third pillar:the system of elderly savings organised involuntary mutual pension schemes launchedin 1993, which the state encourages throughtax allowances.Another non-pension insurance element ofsocial insurance for the elderly is the elderlyallowance system introduced in 1998. Thesocial allowance system operates separatelyfrom pension insurance in respect of finance

and organisation, and in this framework localgovernments, on the basis of actual incomeor financial circumstances, provide the el-derly in needwith a minimum income, or supplement ex-isting very low incomes to such minimumlevel. The pension insurance system in Hungaryconstitutes a unified system for the vast ma-

jority of those insured. This means regulationsare completely identical for the vast major-ity of those conducting earning activity, irre-spective of the form of the legal relationshipin which they conduct such activity.

In pillar I, the insured pay pension insurancecontributions determined on the basis of

present gross monthly salary to the StatePension Insurance Fund, totalling 8.5%.Contributions encumbering the employer

shall be paid up to a specified income limit(double the prevailing national gross averagesalary) on parts of salary or income. The indi-vidual does not have to pay contributions onsalary parts over this level. In calculating the

employers contribution payment obligationthere is no upper income limit.

Compulsory pension insurance in Hungaryextends to every citizen conducting earningactivity, without consideration for the legalform in which the activity is conducted.

The conditions for entitlement to old age

pension:

1. Minimum insurance (period of service):for partial pension in pillar I, 15 yearsinsurance or contribution payment pe-riod is required, while a 20-year periodis required for entitlement to full pen-sion, which period includes time spenton sickness leave, on sick pay, pregnancy

and confinement benefit, and periods ofmilitary service or unemployment provi-sion. There is no minimum private pen-sion scheme membership time stipu-lated in pillar II. For membership periodsshorter than 180 months, the provisionmay be taken up in one lump sum.

2. Pension age limit: in both pillars the agelimit providing entitlement to old age

pension for both sexes uniformly hasbeen set at 62 from 2009.

Regulations for calculating pension provision:in pillar I, the amount of pension depends onthe size of salaries and the duration of insur-ance period. A minimum amount exists, andthe pension may not be more than the amount

of average salary serving as the basis for calcu-lation. There is no guaranteed minimum forlifetime allowance provided by pillar II.


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Supplement for dependents: relatives andchildren maintained by pensioners in Hun-gary are not entitled to additional pensionsor supplements through the pension system.Subsidy of dependents takes place in theframework of the social system, operating

separately from pension insurance.Pension alongside salary: in Hungary pen-sions are due without restriction, irrespectiveof whether or not the pensioner conductsearning activity.

Taxation of pensions: pensions originatingfrom pillar I are not classified as taxable in-come. If other taxable income exists along-side the pension, this in itself is taxed underthe general regulations. Services originatingfrom pillar II are taxed in a special way: 50% ofthe highest rating tax shall be paid.

Survivors pensions

Widows pension system

Anyone is entitled to a widows pensionwhose deceased spouse or partner acquiredthe insurance period necessary for old age ordisability pension, or who died as an old ageor disability pensioner.

A widows pension due under any title shallbe classified as tax-exempt income, and anytaxable income and salary earned in addition

shall be independently taxable in accordancewith the general regulations.

Orphan benefit

Children are entitled to orphan benefit whoseparent(s) acquired the necessary period ofservice for old age or disability pension bythe time of his/her death, or died as an old-

age or disability pensioner. Orphan benefitis also due to adopted children, brothers andsisters and grandchildren, if the deceased

maintained them in his/her own household,and there is no capable relative under an ob-ligation to maintain the child. Entitlement toorphan benefit is not affected if the child orhis/her living parent gets married, or they areadopted.

Orphan benefit, in the event of the conditionsof entitlement being fulfilled, is due from thedate of death (at the earliest) until the childreaches the age of 16. If the child is studyingat an educational institution in daytime study,orphan benefit shall be due for the period ofstudies, but not beyond the age of 25.

The minimum orphan benefit is determinedby law, and there is no maximum amount.Orphan benefit is tax exempt income.

Parents pension

Parents are entitled to a parental pension iftheir child died after acquiring the necessaryperiod of service for old age or disability pen-

sion, or died as a disability pensioner, if the parent was disabled at the time of the

childs death, or had reached the age of 65,

the parent had largely been maintained

by his/her child for one year prior to his/her

death.

Entitlement also extends to grandparents ifthey are being maintained by a grandchild

and foster parents if they have kept their fos-ter child for a minimum of 10 years.


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Insurance for occupational

accidents and diseases

Accident disability benefits

Beneficiaries are identical to the personsentitled to old age or disability pension. In

the event of an industrial accident or occu-pational disease, no prior insurance period isstipulated for entitlement. Further conditionsof entitlement to accident disability pensionare identical to those of disability pension,with the obvious difference that the 67% re-duction in working capacity arose due to anindustrial accident or occupational disease.

The level of accident disability pension de-pends on the degree of disability and theduration of insurance.

Accident relatives benefits

If death takes place as a result of an industrialaccident, the relatives, widows, orphans andparents, depending on the periods of insur-

ance of the deceased, shall be entitled to therelatives benefits outlined in the foregoing.

Family benefits

There is a wide range of family benefits avail-able in Hungary, and by European standards,allowances are high. In addition to the ben-efits outlined, the settlement local govern-

ment may, in a decree, supplement suchbenefits on behalf of the socially needy, un-der the terms and in the manner specifiedin the decree, and may establish other cashsubsidies.An example of this could be one-off as-sistance provided by the competent localgovernment for the domicile, in an amountagreeing with maternity subsidy, or theschool-starting subsidy, provided once ayear. The following are the major types of familybenefits in Hungary: childcare benefit,

regular child protection subsidy,

exceptional child protection subsidy,

family supplement,

childcare assistance, child raising subsidy,

maternity subsidy.


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Unemployment benefits

Act IV of 1991 on Promoting Employmentand Providing for the Unemployed has beenamended by Act LXX of 2005, which en-tered into force 1 November 2005. With theamendment a new job-seeker benefit sys-

tem has been set up. The former unemploy-ment benefits have been deleted and newtypes of benefits, namelyjob-seeker benefitand job-seeker aid have been introduced.The aim of the new system was, firstly, to fa-cilitate the unemployed persons to find a job,secondly, to ensure that any group of the un-employed should not receive lower amountof benefit. Any decrease in the daily averagebenefit should be balanced by a longer ben-efit period.

a)

Job-seeker benefit shall be granted to a per-son who is a job-seeker, has spent at least 365days in employment over the four years priorto becoming job-seeker, is not eligible for

invalidity or accident-related disability pen-sions and is not receiving sick-pay, wishes tofind a job, but neither he, nor the competentlocal employment centre is able to find him asuitable job. The amount shall be calculatedon the basis of the average earnings of thejob-seeker during the four calendar quartersprior to becoming job-seeker. If a job-seekerwas employed by more than one employer

during the four calendar quarters prior tobecoming job-seeker, the job-seeker benefitshall be calculated on the basis of the aver-age earnings received from all employers. Ifthe average earnings of a job-seeker cannotbe established, the job-seeker benefit shallbe calculated on the basis of the national av-erage wage applicable to his last position, or

to similar jobs, prior to becoming job-seeker. The basis of the job-seeker benefit for oneday shall be the thirtieth of the monthly av-

erage earnings of the job-seeker. In the firstperiod of payment, i.e. until the end of thefirst half of the total payment period, not ex-ceeding 91 days, the job-seeker benefit shallbe 60 per cent of the earlier average earnings

of the unemployed described above. In thiscase the minimum amount of the benefitshall be equal to 60 per cent of the manda-tory minimum wage being in force on thefirst day of eligibility for the job-seeker ben-efit and the maximum shall be 120 per centof the mandatory minimum wage. In the sec-ond half of the payment period, the amountof job-seeker benefit shall equal 60 per centof the mandatory minimum wage being inforce on the first day of eligibility for the job-seeker benefit. If the average earning is lowerthan the minimum amount of the job-seekerbenefit, the job-seeker benefit shall be equalin both period of the payment to the aver-age earnings. The duration of payment ofjob-seeker benefit shall be calculated on the

basis of the period spent in employment bythe job-seeker during the four years prior tobecoming job-seeker. The duration of em-ployment shall not include any period duringwhich the job-seeker was drawing job-seekerbenefits. There are some periods determinedby the act which extend the period of fouryears defined above, if no employment re-lationship was established during such peri-

ods (e.g. regular and reserve military service,civil service, sickness resulting in incapacityto work, sick-leave with pay for taking care ofa sick child, etc.) The duration of payment inthe first period cannot exceed 91 days. Thelength of the second period equals to theremaining entitled days, maximum 179 days. The total period of payment of job-seeker

benefit shall be 270 days.


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b)

Job-seeker aid. Upon request, job-seeker shallbe granted a job-seeker aid, if the job-seekerbenefit was established for the job-seeker fora period of at least 180 days, he has exhaustedhis period of eligibility for job-seeker benefit,

and he submitted his application within 30days starting from the termination of the pay-ment of the job-seeker benefit,or thejob-seek-er has spent at least 200 days in employmentin the four calendar years prior to becoming job-seeker, and is not entitled to job-seekerbenefit, or he has no more than five years toattain retirement age as applicable at the timeof submission of the application, has receivedjob-seeker benefit for at least140 days and hasexhausted the period of eligibility for job-seek-er benefit (and he should reach retirementage within three years of having exhaustedthe job-seeker eligibility period, and shouldhave the service time necessary for old-agepension). The amount of job-seeker aid shallbe 40 per cent of the mandatory minimum

wage being in force on the day of submis-sion of the application. If the average earningis lower than that amount, the amount of thejob-seeker aid shall be equal to the amount ofthe average earnings. Job-seeker aid shall bepayable for 90 days, or for 180 days if the job-seeker has already reached 50 years of age atthe time of submission of the application, or, inthe case of elderly persons, until the job-seeker

becomes eligible for old-age pension, invalid-ity or accident-related disability pension.

Due to the shortness of the period of unem-ployment allowance payments, a larger roleis given to labour market services, to help theunemployed capable of accepting work withthe targeted application of services to return

them to the labour market, even during theallowance period.

Employment legal regulations assist place-ment of the unemployed partly by subsidiesdirectly provided to the unemployed andpartly to employers employing them.

The subsidies that may be provided to the

unemployed are the following: training course assistance,

intensive job-seeking subsidy,

assistance for the unemployed to become

entrepreneurs,

self-employment subsidy.

The subsidies that may be provided to theemployer are: subsidies serving the expansion of employ-

ment (a subsidy may be provided to the em-

ployer in an amount up to 50-100% of the

employees wages for a period of no more

than one year if it undertakes certain condi-

tions related to employment),

subsidy of non-profit work,

assumption of contributions relating to em-

ployment, subsidy of employment of those changing

job skills,

subsidy of labour market schemes.

The settlement local governments pay regu-lar social assistance to persons not having in-come from employment who, on the basis oftheir social position, require such assistance.

Useful links

: :Employment Policy and Labour: : www.fmm.gov.hu

: :National Employment Office: : www.afsz.hu


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EURES advisers 2006

Baranya County Labour CentreZOLTN GOLYKH-7621 Pcs, Kirly u. 46.Phone: +36 (72) 506-898,Fax: +36 (72) 506-804

e-mail: [email protected] County Labour CentreESZTER MOLNRN HEGYIH-6000 Kecskemt, Klapka u. 34.,Phone: +36 (76) 486-588,Fax: +36 (76) 486-592e-mail: [email protected]

Bks County Labour CentreATTILA JEGYINKH-5600 Bkscsaba, rpd sor 2/6.Phone: +36 (66) 445-269/1126Fax: +36 (66) 445-269e-mail: [email protected]

Borsod-Abaj-Zempln County Labour CentreSNDOR OROSZH-3900 Szerencs, Kassa t 23.Phone: +36 (47) 361-909*15Fax: +36 (47) 361-107*30e-mail: [email protected]

Csongrd County Labour CentreGNES GRGYNH-6721 Szeged, Bocskai u. 10-12.Phone: +36 (62) 561-579, Fax: +36 (62) 555-581e-mail: [email protected]

Gyor-Moson-Sopron County Labour CentreMNIKA CZHH-9021 Gyr, Vroshz tr 3.Phone: +36 (96) 529-910,Fax: +36 (96) 319-399

e-mail: [email protected] County Labour CentreADRIENN SZAKCSH-9024 Gyor, Bartk Bla u. 2.Phone: +36 (96) 327-666, Fax: +36 (96) 317-423e-mail: [email protected]

Hajd-Bihar County Labour CentreKRISZTINA ROKN TOMA dr.H-4025 Debrecen, Piac u. 54.Phone: +36 (52) 507-442, +36 (80) 204-449

Fax: +36 (52) 418-229e-mail: [email protected]

Heves County Labour CentreGZA SURNYIH-3300 Eger, Kossuth L. u. 9.Phone: +36 (36) 522-789, Fax: +36 (36) 522-779e-mail: [email protected]

Jsz-Nagykun-Szolnok County Labour CentreGNES BOROSH-5000 Szolnok, Kossuth L. t 6-8.Phone: +36 (56) 375-388, Fax: +36 (56) 420-285e-mail: [email protected]

Komrom-Esztergom County Labour CentrePTER CSORDSH-2800 Tatabnya, Sgvri t 20.Phone/Fax: +36 (34) 317-070

e-mail: [email protected] County Labour CentreATTILA LERCHH-3100 Salgtarjn, Alkotmny t 11.Phone: +36 (32) 317-774, Fax: +36 (32) 310-327e-mail: [email protected]

National Employent OfficeGABRIELLA BONCZN FARKASH-1086 Budapest, Szeszgyr u. 4.Phone: +36 (1) 303 0822*129, Fax: +36 (1) 303 0824

e-mail: [email protected] Employent OfficeILDIK PAPH-1086 Budapest, Szeszgyr u. 4.Phone: +36 (1) 303-0822*130Fax: +36 (1) 303-0824e-mail: [email protected]

National Employent OfficeISTVN SRTO-RADICSH-1086 Budapest, Szeszgyr u. 4.Phone: +36 (1) 303-0822, Fax: +36 (1) 303-0824e-mail: [email protected]

Somogy County Labour CentreZOLTN FRISSH-7400 Kaposvr, Fo u. 37-39.Phone: +36 (82) 505-523, Fax: +36 (82) 505-550e-mail: [email protected]


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Szabolcs-Szatmr-Bereg County Labour CentreEMESE TRKH-4400 Nyregyhza, Egyhz u. 13-15.Phone: +36 (42) 594-016, Fax: +36 (42) 594-017e-mail: [email protected]

Tolna County Labour CentreZSOLT FARKASH-7090 Tamsi, Szabadsg u. 15.Phone: +36 (74) 570-280,Fax: +36 (74) 473-350e-mail: [email protected]

Vas County Labour CentreKRISZTINA MIZDAH-9700 Szombathely, Holln E. u. 1.Phone: +36 (94) 520-420,

Fax: +36 (94) 505-747e-mail: [email protected]

Veszprm County Labour CentreANDRS KALMRH-8200 Veszprm, Megyehz tr 3.Phone/Fax: +36 (88) 328-504e-mail: [email protected]

Zala County Labour CentreILDIK RADNTIN SNDOR

H-8900 Zalaegerszeg, Mrtrok u. 42-44.Phone/Fax: +36 (92) 549-480e-mail: [email protected]


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