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According to the government’s decision, the minimum pension will remain at 28,500 HUF without a time limit, that is, the minimum amount of the total old-age pension, which has not changed since 2008. The problem not only with this is that the amount is far below the daily reality, but also with the fact that many social benefits, benefits and aid are linked to it.
The Index also reported that a decree had been published in the December 30 issue of the Hungarian Gazette. “Baby” the minimum pension, that is, the minimum amount of the total old-age pension, remains at 28,500 HUF per month.
Pension expert András Farkas reminded him in his analysis written on the PensionGuru website:
“For the last 13 years, the last date for the determination of the pension has had to be changed at least once a year, in the case of old-age pensions and orphan benefits established before that date, even if the amounts degradingly low have never changed in the last decade and a half. “
However, he added, as of January 1, 2021, however “This terribly small amount can remain until the end of time.”
According to previous data from the CSO, about 18,000 people can receive a pension of less than HUF 28,500 / month (most are partial pensioners who also have a pension from another country), about 29,000 can receive a pension of between HUF 28,500 / month and HUF 49,999 / month.
Previously, how can the minimum pension amount remain unchanged for 13 years? In his analysis, András Farkas wrote that the only rational reason may be that, in addition to the determination of the old-age pension, the current minimum amount of the old-age pension plays an important role in many other areas, and its overall budgetary impact is so significant.
The amount and conditions of the equitable pension, the exceptional pension increase and the lump sum are also linked to the amount of the minimum pension.
However, in the field of social benefits, the importance of the minimum pension is even greater, since the conditions and scope of the following benefits are determined in different percentages.
András Farkas pointed out.
Social benefits linked to the amount of the minimum pension include:
- Attention to active age (substitute employment subsidy, subsidy for health problems and childcare)
- retirement,
- municipal support,
- public health care,
- right to health services.
Increases or reductions in regular monthly social benefits, such as old-age benefits, childcare and healthcare benefits, and care benefits, are also linked to changes in the amount of the minimum pension.
In addition, the reimbursement rate for personal care benefits, the conditions for the reimbursement rate for placement in an institution, the childcare allowance, the parenting allowance (full-time maternity), the amount of the allowance maternity benefit, the amount of the accident benefit in the case of health insurance benefits, the regular child protection allowance The minimum pension also influences the child’s conditions, the right to free child care and the provision of textbooks fees, the amount of cash benefits for the tutor and the professional tutor’s remuneration.
In his summary, the pension expert András Farkas also mentioned that raising the amount of the minimum pension can affect more than one hundred thousand benefits, subsidies, aid, “In other words, it causes a spending surplus of the order of one hundred billion in the state budget.”
According to data from the OSC, around 1.1 million people can live below the poverty line, in 2019 17.7% of the total population, 1,695,000 people were at risk of poverty or social exclusion, 118,000 less than in 2018. They can be significantly affected by the amount of the minimum pension if they wish to claim one of the social benefits.
Increasing the minimum pension would automatically mean an increase in the amount of several benefits, or many more could be entitled to each benefit.
It is telling that, as a result of annual inflation, the real value of the minimum pension of HUF 28,500, which has not changed since January 2008, has deteriorated by more than 40 percent.
As a solution, the pension expert previously suggested that all benefits that should be provided outside the pension plan be deducted from the minimum amount of the old-age pension.
András Farkas would consider it justified to introduce a basic annual amount for the calculation of all family and social benefits, and the new minimum could be linked in some percentage to the minimum wage, the median pension, the average pension or even a subsistence minimum for pensioners.
“Many solutions are conceivable, it is worth studying the pension systems of other EU Member States in this regard as well”
The expert added.
Éva Kőnig, a former head of the department of the Ministry of Social Affairs and Labor, who personally worked on social law, stated in a 2019 article in the Index: Hungarikum Social Policy that so many different benefits are linked to another benefit.
“In other countries, the benefits are more closely related to the cost of living and raising children or to the poverty line or subsistence level.”
He said.
He also said that until 2008 the purchasing power of the minimum pension was kept under review, the amount increased several times. He also spoke about the objective of keeping social benefits at their value, so it was logical to set them at the minimum pension. However, they did not expect pensions to rise regularly based on inflation, but not the minimum pension amount.
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