European Foundation
for the Improvement of
Living and Working Conditions

The tripartite EU agency providing knowledge to assist
in the development of better social, employment and
work-related policies

EU PolicyWatch

Database of national-level policy measures

Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure HU-2021-40/2034 – measures in Hungary

Tax rebate for parents

SZJA visszatérítés

Country Hungary , applies nationwide
Time period Temporary, 30 September 2021 – 19 June 2022
Context COVID-19
Type Legislations or other statutory regulations
Category Promoting the economic, labour market and social recovery into a green future
– Support for spending, stimulus packages
Author Nóra Krokovay (KOPINT-Tárki) and Eurofound
Measure added 11 October 2021 (updated 08 June 2022)

Background information

The prime minister announced in June 2021 that the government plans to refund personal income tax paid on the year of 2021 to taxpayers with children. Government decree 560/2021 (30 September 2021) states that employees and the solo self-employed will be eligible for the tax rebate payable in 2022.The subsidy applies for tax payable after deductions for children.

Content of measure

The refund is capped at 12 times the tax calculated on the gross monthly average national wage as published by the central statistical office KSH for December 2020, estimated at around HUF 800,000 (€2,222).

Both parents and expectant parents are eligible for the rebate each, which is due in February 2022. Self-employed people paying the simplified flat tax (KATA) with children are eligible for a tax rebate of 25% of their annual KATA tax paid for 2021. The KATA tax is HUF 50,000 a month or by choice HUF 75,000 a month for full-time self-employed and HUF 25,000 a month for part-time self-employed (working 36 hours or more a week in employment).

Thus the cap for the rebate here is HUF 225,000 or €625. Self-employed parents get the rebate within 30 days of filing their tax returns (19 June 2022 if they file on the deadline of 20 May).

Use of measure

About 1.9 million taxpayers are estimated to get the tax rebate. The measure is calculated to cost HUF 600 billion (€1.67 billion). The average number of employees in Hungary was 3.116842 million in December 2020 (data from the central statistical office KSH). In December 2020 the gross median wage was HUF 336,177 (€933.8) a month (about HUF 222,000 net without child tax credit) with an employee stock of 3.04 million. Because the child tax credit system awards incrementally more tax credit for more children, but the current parent tax rebate awards the same regardless of the number of children, the most to benefit is parents with one child and high employee income for both parents. Low-income earners with three or more children do not benefit as they already pay no or very low taxes due to the child tax credit system.

Target groups

Workers Businesses Citizens
Parents in employment
Does not apply to businesses Does not apply to citizens

Actors and funding

Actors Funding
National government
National funds

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

Social partners were not involved in any way in the development of this measure.

Views and reactions

The trade union confederation MASZSZ views the measure as a way to lift consumption, as it gives the largest amount of support to families with two high-income earners and one child, and generally supports higher-income families more. The measure can also be seen as a one-off correction to the tax system which as a rule favours families with more children more. It does not support the unemployed or stay-at-home parents who are not eligible for the rebate.

Sources

  • 10 June 2021: Calculations for the tax rebate for parents - how much? (www.portfolio.hu)
  • 30 September 2021: Govt decree 560/2021.
  • 01 October 2021: State gives out gifts before elections (www.portfolio.hu)

Citation

Eurofound (2021), Tax rebate for parents, measure HU-2021-40/2034 (measures in Hungary), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/HU-2021-40_2034.html

Share

Eurofound publications based on EU PolicyWatch

30 January 2023

 

Measures to lessen the impact of the inflation and energy crisis on citizens

Governments across the EU continue to implement policies to support citizens and businesses in the face of rising food and energy prices caused by the COVID-19 crisis and intensified by the war in Ukraine. This article summarises the policy responses as reported in Eurofound's EU PolicyWatch database from January to September 2022.

Article

12 September 2022

 

First responses to cushion the impact of inflation on citizens

Although the worldwide pandemic situation had already disrupted supply chains and triggered increases in energy and food prices in 2021, the situation deteriorated in 2022 with the Russian invasion of Ukraine.

Article

12 September 2022

 

Policies to support EU companies affected by the war in Ukraine

This article summarises the first policy responses that governments across the EU have started to implement to support companies affected by the rising prices, and those with commercial ties to Ukraine, Russia or Belarus.

Article

5 July 2022

 

Policies to support refugees from Ukraine

This article summarises the first policy responses of EU Member States, including those of the social partners and other civil society actors, enabling refugees to exercise their rights under the Temporary Protection Directive.

Article

Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.