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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. Although benefit payments to families are higher than the EU average, low employment rates make economic conditions difficult for families. At 1.3 children per woman in 2012, the Hungarian fertility rate was one of 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.

 

Few mothers with children under six in employment

Many Hungarian parents of young children face problems in reconciling work and family life. This can be seen from the low levels of employment for mothers with children under the age of six – just 36% in 2012 compared to the EU average of 59.1%. Hungarian fathers of children in this age group also work less than the EU average: 79.8% versus 86%.

In 2012 the overall employment rate was 52.1% for women and 62.5% for men, compared to 58.5% and 69.6% respectively in the EU. Few employed women and men work part time. In 2012, the figures were 9.7% for women (32.5% in the EU) and 4.7% for men (9.4% in the EU). 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, the highest percentage in the EU. At 18% in 2011, the gender pay gap was slightly higher than the EU average (16.2%).

Since January 2011 employers of mothers with small children have had the right to a social contribution subsidy. In the case of two part-time workers sharing a full-time job, the employer only has to pay 20% of the national insurance contribution instead of 27%, where at least one of the workers is a mother returning to her former place of work from maternity leave. In addition to this, an employer who wishes to employ in a full-time capacity a mother just ending her maternity leave or in receipt of childcare allowance, only needs to pay 10% of the national insurance contribution in the first year of employment and 20% in the second year. The government plans to extend the duration of the subsidy after 2013, and significantly increase its level.

From July 2012, the new Labour Code of Hungary contains an obligation on 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. This obligation has already been introduced to public sector from January 2010.

A wide range of family benefits

Spending on family benefits amounted to 2.9% of Hungary’s GDP in 2011, compared to 2.2% for the EU as a whole. Maternity benefit (called TGYÁS) is equal to 70% of average gross earnings and is available for 24 weeks following childbirth.

Parents who satisfy social insurance contribution conditions are entitled to parental leave up to the child's third birthday and parental benefit (called GYED) amounting to 70% of their earnings but not exceeding 130,200 forints per month (about €465). The monthly family allowance for one child is 12,200 forints (about €39), 13,300 forints (about €44) per child for two children and 16,000 forints (about €57) per child for three or more children.

Irrespective of whether social contributions have been paid, there is a child home care allowance for parents or grandparents caring for children under three (called GYES) and a child allowance 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 €100). 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.

To be eligible for the child home care allowance, a parent must not be in employment until the first birthday of the child and may only work in a part-time capacity thereafter. In the case of a grandparent, to be eligible, they must not be in employment until the third birthday of the child may only work part-time (four hours per day) thereafter. There is no restriction on working from home.

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. From September 2014, parents will be obliged to take their children to nursery from the age of three until they reach school age (currently it is obligatory only from the age of five).

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 €152) 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 €43) In the case of a child in short-term or long-term foster care, the state pays in the maximum top-up amount.

From December 2002, fathers can take an extra five days off work, in parallel with maternity leave, paid for by the employer, who is then refunded by the state. In the case of newborn twins, or other multiple births, since 2012 fathers get seven days instead of five. In addition, both parents are eligible to an extra two days of paid leave per child each year (to a maximum of seven days per year). Before 2012, only one of the parents—usually the mother—was eligible for this extra paid leave, but it was extended to both parents this year.

Since early 2011, Hungarian families have also benefited from significant tax relief, after the introduction of a ‘Family Tax Allowance’. A monthly amount of 10,000 forints (about €35) is deducted from taxes paid by families with one child, 20,000 forints (about €70) by families with two children and 33,000 forints (about €118) per child is deducted for those with three or more children. In 2011, about 810,000 parents were eligible for this family tax allowance, and its total yearly amount was 160 billion forints (about €570 million), which equals 0.6% of the GDP.

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.

Emphasis on developing daycare for young children

75% of children aged three to six were enrolled in formal childcare in 2011, which was below the EU average of 83%. In pre-school facilities, classes are free, as well as care to prevent the emergence of dyslexia and regular healthcare checks. Parents have to pay for meals but children living in poor families or in families with three or more children are given food for free. Since 2011, children have received free meals in all primary school classes.

More challenging is childcare for younger children, which according to Eurostat is provided to around 8% of children under three, compared to 30% in the EU in 2011. The government is putting particular emphasis on the development of children’s daycare and is aiming to meet the Barcelona targets. In 2009–2010 an action plan was launched to increase the capacity of daycare by 3,200-3,500 new places before 2013.

In order to tackle the problem, the government is taking steps to increase the number of places available in crèches and daycare centres. More flexible childcare centres have been set up. They are operated by parental cooperatives, non-governmental organisations, companies or by the local government and can take up to seven children. Since 2007, the number of daycare centres has increased fivefold.

The proportion of children at risk of poverty is at 40.9% in 2012. According to 2007 data, it was estimated that some 14% of children live in jobless households, compared to 9.3% in the EU. As part of efforts to alleviate child poverty, free or discounted meals in crèches, nursery schools and in the first seven grades of primary schools are provided to children from low-income families. In certain cases, children can also get their school textbooks free of charge.

The information in the country profile was last updated in February 2014.

Family-friendly workplace award

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 National Resources. The award is worth 20,000,000 forints (about €70,000) since 2011. The categories have been revised and now include small, medium and large enterprises and government bodies. Companies need to apply in order to be considered for the award. In 2011 the authorities received around 65 valid applications, from which 18 were selected for the award at the end of 2011. The winners of the competition can use the ‘Family-friendly Workplace’ logo for a year which increases their visibility and status. They are also are entitled to a non-refundable grant of between 1,000,000 (€3,600) and 2,500,000 forints (€8,900).

As a result of the success of the 2011 award, the Hungarian government plans to continue it into 2012 as well.