Background information

Government decree 58/2020 raises the ceiling for bonuses that employers can pay to employees on the SZÉP card to HUF 800,000 (€2,219) a year (from HUF 450,000) for private companies and HUF 400,000 (from HUF 200,000) for public (state budget-run) institutions. These payments will also be exempt from one type of social contribution (but it is not completely tax-exempt) for the duration of the pandemic.

Content of measure

The raised amounts in the SZÉP card bonuses paid by employers to employees is exempt from the social contribution szocho, but employers continue to pay 15% tax on the amounts provided during the COVID-19 pandemic.

The distribution of the entire HUF 800,000 maximum amount for different spending is as follows:

• Up to HUF 400,000 (€1,110) on accommodation
• Up to HUF 265,000 (€735) on hospitality
• Up to HUF 135,000 (€374) on recreation

The measure was supposed to be applied until 30 June 2020. However, on May 23 2020 the tax exemption of the SZÉP card bonus payments was extended until 31 December 2020 (Govt decree 225/2020).

Use of measure

The government estimated that the measure could affect 115,000 people. In January-August 2019 (before the pandemic), Hungarians spent HUF 130 billion from their SZÉP card bonuses on tourism, up by 150% from the same period in 2018. A press report said that employer payments were up by 7% in January-August this year, as compared to the same period in the previous year while spending from the SZÉP card budget grew by 15% by August.

Target groups

Workers	Businesses	Citizens
Employees in standard employment	Sector specific set of companies	Does not apply to citizens

Actors and funding

Actors	Funding
National government Company / Companies	Companies

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	No involvement	No involvement
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: N/A

Involvement

The Hungarian Chamber of Commerce and Industry made suggestions in the design of this measure, according to press reports.

Views and reactions

TU confederation MASZSZ proposed that the SZEP card system should relax the rules for the duration of the COVID-19 pandemic and allow workers to spend their allowance on catering instead of accommodation.

The retail sector requested that the bonuses be spent in grocery stores. The tourism sector proposed an extension until the end of 2021, but these proposals have not been included. Critics have questioned how this measure will help the tourism industry while the country is under lock down or partial curfew, but perhaps the bonus money was spent in tourism after the pandemic period (in the summer).

In December 2021, the hotels and caterers association Magyar Szállodák és Éttermek Szövetsége (MSZÉSZ) expressed surprise and concern over the measure to allow grocery purchases from the SZÉP card balance. This measure will reduce revenues in tourism, which has already suffered due to COVID-19, they said. Rural accommodation providers, restaurants, family businesses will suffer the most, MSZÉSZ added. The SZÉP card measures were regarded as a form of support for the tourism industry in 2021. See related measure Provisions relating to accommodation services .

Sectors and occupations

This case is not occupation-specific.

Sources

• 07 April 2020: Szép card to get tax reduction and limit raise
• 22 May 2020: Govt decree 225/2020
• 23 May 2020: Govt decree 140/2020
• 16 June 2020: Act LVIII 58/2020 on the state of pandemic emergency (njt.hu)
• 22 September 2020: Tourism Online: Szép card spending seen to break records in 2020 (turizmusonline.hu)
• 27 March 2021: Govt decree 150/2021 (njt.hu)
• 15 April 2021: Govt decree 178/2021
• 24 December 2021: Govt decree 781/2021
• 24 December 2021: Govt decree 784/2021
• 27 December 2021: Caterers angry over SZEP card changes (www.portfolio.hu)