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Hungary: Developing childcare services to help parents back to work

According to a recent Eurobarometer survey, Hungarians are among the Europeans who struggle the most to find the right balance between work and family life. Benefit payments to families are higher than the EU average; the objective prioritized by the government is to give the right of choice for parents between childbearing and employment, and to reduce the burdens of having children. For this reason, efforts are made to ensure that all children wished for are actually born. At 1.35 children per woman in 2013, the Hungarian fertility rate was among the lowest in Europe. Developing childcare services and new labour market incentives to help parents return to work is part of the government’s strategy to tackle these issues and to implement a lasting turn in demographic trends.

Few mothers with children under six in employment

The employment and the easy reconciliation of work and family obligations are of key importance. Therefore the Hungarian government continues to make significant efforts in helping the parents reconcile their careers and raising children by introducing family-friendly measures.
Mainly, there are two different ways of supporting families with young children: the first one is providing an adequate number of child-care facilities to enable mothers to return to work just a relatively short time – a couple of months – after childbirth. This practice is the most common in the Western European countries. The other direction is followed especially by those countries in which there are not enough child-care institutions and accommodation places available, and because of that they have to provide adequate financial subsidies for a much longer period in order to support parents who are forced to stay at home with their children for years. And, of course, a lot of policies exist that provide sort of a mix of the two practices mentioned above.

The principle of the Hungarian family policy is that parents should be offered the opportunity to decide if they wish to stay at home and raise their children for a longer period of time or to return to the labour market as soon as possible. Therefore, citizens are offered, on the one hand, childcare support and family support both on a normative basis and a social security basis and, on the other hand, benefits that promote return to the labour market and the development of daycare for children. Previously Hungary has predominantly followed the second conception because of the lack of sufficient child-care places. In 2013, only one in ten children (10%) below the age of three were using a formal child-care institution.. In the past five years since 2010, the total number of places in crèches and similar institutions (daycare centers) has increased by almost 12,000 to a total number of above 49,000 places; this was a significant growth of about 32 percent. The Hungarian government is currently planning to further increase the number of daycare places available for children under 3 years of age from 42,000 to 60,000 in the period from 2016 to 2018 and, thus, to help mothers returning to the labour market. Therefore in 2018, almost 23 percent of children under the age of three could be accommodated in the day child-care institutions. This improvement is a substantial help for mothers in providing places for their children while going back to work. However, this is still quite far from the EU average level in 2013 (27%), and also from the 33% Barcelona target.

In case of childcare places available for children above the age of three, the situation is much better, with 84% of children from 3 years to minimum compulsory school age using formal childcare (the EU28 average rate is 82% in 2013).

Difficulties in reconciling work and childcare responsibilities are also visible in the low levels of employment for mothers with children under the age of six – just 38.4% in 2014 compared to the EU average of 60.7%, although it should be noted that this rate was even lower, only 32.7% in 2010. (Hungarian fathers of children in this age group also work less than the EU average, but the difference is not so remarkable: 85.6% in Hungary versus the EU28 average of 86.5%).

The rate of part-time workers is also considerably low (8.7%) amongst women, according to the average level of 32.8% of the 28 member state countries in 2014. According to a Eurobarometer surveypdf Choose translations of the previous link  on family life, 72% of Hungarians put a high priority on obtaining easier access to part-time work, which is the highest percentage in the EU.
The overall employment level of women differs only slightly from the EU average (55.9% vs.  59.6% in 2014 respectivelly).

Thus, while notable hindrances still exist, Hungary managed to achieve a significant progress in this field. The wage differences between women and men, e.g. the gender pay gap had decreased in the past two years, from 20.1% in 2012 to 18.4% in 2013, but still exceeds the EU average of 16.3%.

The Job Protection Action Plan introduced in 2013 intends to incentivise employers to use female labour force. Within the framework of the Plan, as of 1 January 2013 employers are eligible for contribution allowance in case they employ individuals who belong to the most vulnerable social groups: individuals above the age of 55 or under the age of 25, women with young children, or the long-term unemployed (persons out of employment for 6 months or longer). In the first two years of employment, the social contribution tax is 0% (instead of 27%); in the third year, a reduction of 14.5% is available after the payment period of child care fee, or during the payment period of child care allowance and child-raising support, or during the employment of the individual employed after the end of such payment periods. The base of the allowance is maximised in the gross amount of the salary (without the deduction of the taxes and other amounts payable by the employee), and cannot be higher than HUF 100,000 (about €317). In addition to this, from January 2014 the duration of the subsidy has been increased by two years (one year with full, and one with partial tax exemption) in the case of parents with three or more children. These measures will hopefully increase the willingness of enterprises to employ parents with young children. From 2015, the gross HUF 100,000 (about €317) maximum income level can be applied for parents with young children in case of full employment and part-time employment alike. In March 2015, within the framework of the Job Protection Action Plan, contribution allowance was granted for employers of 39,500 parents returning from their child care allowance/fee period. This rate is 12% higher than it was in the same period of the previous year.

Another difference is that as of 2014 the family tax benefit may be deducted from the pension and health care contributions besides personal income tax, which means that a greater number of individuals may benefit and that citizens with a relatively low income are now in a more favourable position. As a result, in 2014 the scheme left approximately a total of HUF 233 billion (about €738 million) with the families. From 2016 until 2019, the allowance for families with two children will be doubled gradually, in four phases. The final maximum amount per child will be HUF 20,000 (about €63). Thus in 2019 the scheme leaves approximately a total of HUF 300 billion (about €950 million) with the families with children

From July 2012, the new Labour Code of Hungary contains an obligation for all employers in the private sector to allow mothers returning to employment after maternity leave to work part-time until their children reach the age of three, as of 2015, the period of this obligation is extended to 5 years for large families. This obligation has already been introduced to the public sector since January 2010. With this measure, the government plans to make part-time employment more popular amongst employers and workers alike.

It is also essential in helping mothers being able to return to their workplace to get the fathers as well to take greater part in the rearing of their children. To this end, the government made the extra paid leave of 2 days per child per year (to a maximum of 7 days per year) eligible also for fathers, not just for mothers as earlier.
In addition, since December 2002, fathers can take an extra five days off work after the birth of their child, in parallel with maternity leave, paid for by the employer, who is then refunded by the state. In the case of newborn twins, since 2012 fathers get seven days instead of five.

Another important provision of the government in the field of the reconciliation of work and family life was the package of measures called “GYED Extra” which had been introduced since the 1st of January, 2014. This package contained a bunch of complex measures intended to foster livebirths, including that since that date, parents are no longer prohibited to work while receiving family allowances like the child care allowance (called “GYES” in Hungarian) and the child care payment (called “GYED” in Hungarian, hence the name of the whole package) after the first birthday of their child. Before that, employment was completely forbidden while receiving the GYED, and only part-time work was possible during the GYES. As of 1 January 2016, parents may take up employment without restrictions when the child reaches 6 months of age. This measure was a very important step forward in stimulating parents with young children to return to their workplaces in an earlier period; as a result of the measure, in 2014 47,000 parents with young children were beneficiaries of some measure of GYED Extra.

A wide range of family benefits

Spending on family benefits amounted to 2.6% of Hungary’s GDP in 2013, compared to the 3% in 2009. In general, there are two types of financial subsidies for parents with children: the subsidies that are only eligible for parents being employed, and those allowances (generally with smaller amounts) that are eligible for all parents irrespective of being employed or not.

Parents who satisfy social insurance contribution conditions (at least 365 days of employment within the last two years) are entitled to parental leave up to the child's third birthday. In the first 24 weeks following childbirth, the mother is eligible for infant care allowance (called CSED), which is equal to 70% of average gross earnings. After this period, until the second birthday of their child, parents can be eligible for child care payment (called GYED) amounting also to 70% of their earnings but with an upper limit not exceeding HUF147,000 per month (about €465); this amount increased by 43% from 2010 to 2015.

In addition to these allowances which only employed parents are eligible for, there are another types of child-care subsidies that every parent are entitled to. The monthly family allowance for one child is 12,200 forints (about €40), 13,300 forints (about €43) per child for two children and 16,000 forints (about €52) per child for three or more children. This support is available until the child is beyond school age (e.g. about 18 years of age).

The amount of the child care allowance for parents or grandparents caring for children under three (called GYES) and a child raising support for parents of three or more children with the youngest between three and eight years old (called GYET), both equal to the minimum old-age pension of 28,500 forints (about €92). In the case of twins, the age limit for the receipt of GYES is school age and, in the case of disabled children, it is ten years. From 2011, the amount of GYES in the case of multiple births is multiplied by the number of children born. Another favourable measure is that since 2011 parents who adopt children are also eligible for GYES.

After the child’s first birthday, a parent in receipt of the allowance may use a crèche or other type of daycare for children without time restrictions. Grandparents can use the crèche only after the child’s third birthday and only for a maximum of five hours per day. Compulsory kindergarten attendance introduced in September 2015 is expected to facilitate the entry of women with children younger than 6 years of age into the labour market.  As of September 2015, mandatory nursery school-age will be lowered to 3 years from 5 years. This early entry into a community is intended to promote children's development.

In order to encourage families to make long-term savings for their children, each baby born after 1 January 2006 is entitled to receive a so-called ‘baby bond’. The baby bond is for every baby and is a one-off payment of 42,500 forints (around €135) which must be deposited on a bank account until the child is 18. If parents make a further payment into this account, the state tops it up with 20% of additional deposit, up to a maximum of 12,000 forints (about €38) In case of a child in short-term or long-term foster care, the state pays in the maximum top-up amount.

From January 2012, a new so-called fundamental act (Act CCXI of 2011 on the Protection of Families) has been implemented with the aim of introducing stability to the present system of benefits, subsidies and allowances available for families with children. This Act can only be modified or overruled with a majority of 67% or more of the votes in Parliament, so it guarantees stability and predictability to families, and the hope is that this will encourage them to have more children.

As of 1 July 2015, the social housing subsidy is replaced by the youth home-start subsidy (Hungarian abbreviation: CSOK) which is now offered to a wider range of beneficiaries to promote the achievement of housing-related objectives of families which have or bring up children. Currently, families with one child are also eligible for the subsidy whose amount varies between HUF 500,000 and 780,000 (about €1,584 and €2,472); in addition, the subsidy is also available for purchasing used apartments or for extending existing ones. As a result, the number of applicants and the subsidy amount grew considerably, in the period between July and October 2015, approximately 8000 applicants purchased this subsidy (between 2012 and June 2015 there were only 2200 applicants).

The tax allowance for first-wed new couples, a new tool to decrease the tax base, was introduced in 2015. This measure is intended to encourage young couples to marry: a newly wed couple is eligible for a tax allowance of 5,000 forint (about €15) per month, provided that it is the first marriage of either of them. The couple continues to be eligible for this allowance for maximum two years or until the birth of their first child. This measure is expected to support approximately 30,000 married couples this year.

The Hungarian government introduced the Elizabeth Programme of social vacation to ensure that those in need have available holiday opportunities. Every year, the major target groups include pensioners, large families, persons with disabilities and children.

Emphasis on developing daycare for young children

The focus on childcare is in line with the government prioritising the detection of disorders of early development. The governmental report of 2015 provides an overview of the situation  and sets out measures to ensure efficient further prevention by reinforcing early intervention. By compiling the action plan, the government accepted a cross-sectorial document on the status of experts who help children with late development or psychological disorders, offer support to their families, and promote prevention and development.

The proportion of children at risk of poverty is at 41,4% in 2014, while the EU average in that year was 27,7%. As part of efforts to alleviate child poverty the government has been extending the opportunity for free or subsidized child meals. As of September 2015, free meals in nurseries and kindergartens will be extended to almost 90% of children, involving 230,000 more children in the scheme.

As of academic year 2014-2015, primary school pupils who start their 1st or 2nd year and, as of September 2016, those who start their 3rd year have access to textbooks free of charge. At the same time, textbooks continue to be supplied free of charge to children in need (e.g. children living in large families or children with disabilities).

The information in the country profile was last updated in February 2016.

New brand: Family-friendly country

Since 2000, Hungary has had a family-friendly workplace award to give recognition to companies and institutions that have introduced measures facilitating a better work-life balance among employees. Part of the government’s thinking behind this idea is to create best practice models that other companies can learn from. The Hungarian government revised the scheme and published a new edition of it in 2011.

The competition takes place every year and is run by the Ministry of Human Resources. The award is worth about HUF 50,000,000 (about €159,000) in 2015. The Ministry has involved social actors in the promotion of a family-friendly approach, the restoration of a family-friendly public thinking and practice, and the building of families' communities through campaigns, cooperation with the media, education for family life, introducing an award for families with three or more children etc.

In the framework of the family-friendly country and government, the welfare and well-being of families is taken into consideration in the legislative process, forming a cooperative body within the government responsible for the families.