The first decade of building a family friendly Hungary
2023 September
In 2010 a conservative, Christian democratic FIDESZ government took office, Hungary at the
time was in severe financial and moral distress. The new government committed itself to
building a competitive country, with workfare society, that addresses the country’s
demographic challenges by supporting families, and that is proud of her history and Judeo-
Christian cultural heritage. The focus of public policy has been reverted from the individual
towards the community, and family has been anchored in the newly drafted Fundamental
Law of the country as the basic building block of society. The Cardinal Law on Families
defined the protection of families and the improvement of the wellbeing of families in a
holistic manner, namely as a shared duty of the state, churches, local governments, civil
organizations, Media, and economic actors.
Hungary committed herself to building a country based on a comprehensive family policy, by
mainstreaming and prioritising family issues. The Hungarian Government regards family
policy as investment, as an investment into the wellbeing of our families, as an investment
into the preservation of our nation, and also as an investment into the sustainability of our
social security schemes. We believe in the mobilising effect of family policy, therefore, the
eligibility of receiving most of the family support measures is linked to legitimate
employment. By that, family policy may also contribute to the fundamentals of our social
policy, namely activation, employment and the whitening of our economy.
To further the governmental efforts of the period 2010-2014, family affairs were separated
from social affairs during FIDESZ’s second term in office, since the linkage of these two
areas used to convey the message that having children equals poverty. We are convinced that
the main task of family policy is not combating poverty, but helping individuals to have as
many children as they wish for. Nevertheless, family policy also focuses on underprivileged
and disadvantaged families.
The family support system has been gradually expanded always taking into account the
financial capabilities of the more and more sound Hungarian economy. Between 2010 and
2022 the government more than doubled the financial resources spent on family policy, to
6,2% of our GDP (one of measures of 2022 included), by far more than double the OECD
average. The decisive factor is stability, as parents have to be certain that they can rely on the
support for raising children at least throughout the upcoming two decades. Our national
family policy system, thanks to its complexity, assists families in various ways with an
emphasis on offering each family an opportunity that is most suitable for them in terms of
raising their children. The Hungarian system is unique, as a number of policy measures
directed towards children are shaped in a way that the eligibility is granted from the foetal
age of 13 weeks: this is the case for family taxation, baby expecting subsidy, tax exemption
of mothers under the age of 30, family housing subsidy, student loan repayment exemption.
Similarly, to the previous decades, Hungarians continue to remain pro family and pro
marriage. According to the Hungarostudy research from 2021, those aged 18-40 believe it is
ideally to have 2,3 children in average. In line with this outcome, in the past 10 years, the
Hungarian family policy reached encouraging results: The fertility rate increased from 1,25
in 2010 to 1,59 in 2021, which is the highest value since 1996. Since 2010, a favourable trend
can be detected in terms of marriages and divorces. Marriages are at historical high (more
than 72 000 in 2021), highest number since the eighties, divorces have decreased by 30%,
abortions are at historic low (22 000 in 2021). Contrary to the trend characteristic for most
developed country, the proportion of babies born in wedlock is increasing, and is currently at
70%. Hungarian families could welcome 150 000 more new-borns due to the increase in
fertility during the last 10 years. Putting these data in the European context, no other country
could experience such a positive development.
In parallel, and contrary to the attacks from the left-liberal opposition, that the government
would like to “chain women to the stove”, we can report about a significant increase of 16
percentage point in female employment as compared to 2010, only Malta could do better in
the European Union. Total employment rate is at 78,8%, unemployment rate is among the
lowest in the EU at 4,1%. We can state proudly, that more than 1 million more people are
working and paying taxes in Hungary today than in 2010.
One of the largest achievements is that Hungary provides a real option for young parents,
mothers in particular, so that they can stay at home with their babies even for 3 years if
they wish so and receive payments related to infant and child care or return to the labour
market part-time or full-time and place their children in publicly financed, available and high-
quality nurseries. By these Hungary sends the key message that motherhood is a value for
the entire society, nation per se. In addition, in 2014, the Child Care Fee Extra
programme was introduced. Due to the programme, parents may take up employment full-
time or part-time when their child becomes 6 months old without losing their eligibility for
the Child Care Fee. The Hungarian Government’s aim was to ensure that having children does
not exclude individuals from the labour market. A second aim was to make part-time work
pay as well, given that atypical working conditions, even part-time employment are not yet
very widely spread in our country. The COVID-19 crisis certainly has had significant effects
on atypical working conditions, that has assisted the employability of mothers with young
children in particular.
In accordance with the newly drafted Fundamental Law of Hungary, a constantly growing
number of measures aid families in their everyday life. The flagship of Hungary’s family
support system is the family tax benefit, introduced in 2011. It provides working parents with
the opportunity to reduce their personal income tax. The amount of the reduction depends on
the number of children. Due to this measure, the majority of families with 3 or more children
do not have to pay any personal income tax in Hungary. In order to allow the full use of the
tax relief for the lower income groups, the tax relief may be deducted from their social
security contribution payments as well. In the period of 2016 – 2019, the amount of family tax
benefit for families with two children has doubled. As of 2020, mothers with four or more
children are exempted from paying any personal income tax throughout their career. As of
2022, Hungarians under the age of 25 are exempted from paying any personal income
tax (cap applies), this measure helps approximately 350 000 youngsters to start their career
and family. A kind of tax benefit for first-wed new couples was also introduced in 2015. The
family tax relief left altogether close to 1 billion EUR at the disposal of families, a money
that has been spent locally, increasing internal consumption, which then again contributed
significantly to the record high Hungarian GDP growth. Furthermore, the Hungarian
Government decided to further expend the tax system and thanks to this as of 1 January 2023
mothers under 30 years who give birth to a child or adopt a child do not have to pay PIT until
the level of the average wage level (500 000 HUF).
All mothers are eligible for a benefit called maternity allowance, which is a one-off payment
of approximately 200€ offered when the child is born. If the mother has had social security
coverage before the child was born, Infant Care Fee is offered during maternity leave, that
is, half a year, amounting to 100% (as of 1st
July 2021, previously 70%) of the salary earned
prior to the child was born, no cap applies. By this increase, mothers giving birth to a new-
born will be in a more favourable situation compared to those earning the same, but not
receiving a child, as taxation of the infant care allowance is lower. Young parents are entitled
to paid parental leave until their child turns 3. Child Care Fee is available until the child
reaches the age of two. Its amount is 70% of the salary earned prior to the birth of the child,
but is capped at 810€/month. Another element of the family support system is the Child Care
Allowance, which is granted to all mothers without eligibility testing from age 2 until the age
3 of the child. The amount of the Child Care Allowance is approximately 92 € per month.
One of the leading reasons why couples do not have as many children as they would desire is
the significant postponement of childbirths. Hungary tries to address that by helping young
families in various ways. One is that university studies are taken into account as social
security contributing periods, despite the lack of earnings in these years, meaning that the
full amount of family support is granted for young mothers and fathers who decide to have
their first child during or right after their studies. Other measures targeted towards the
younger generation is in connection with the student loans. According to one such measure
the State reduces by 50% the student loans of mothers at the birth of their second child,
and takes over the redemption of the entire outstanding amount at the arrival of their third
child. As of January 2023, the entire outstanding amount of the student loan is remitted if the
mother is under 30 and has a child (gives birth or adopts) during her tertiary education studies
or within 2 years of obtaining her diploma. By these measures, the government would like to
reduce the negative financial consequences of motherhood many well educated young women
are afraid of.
It is furthermore important to mention the so-called Baby Bond, which enables parents to
save money for their children with state support. These bonds also contribute to the
favourable tendency, that Hungarians and Hungarian families finance the national debt.
As a result of the Government’s measures, the family allowance includes two benefit types:
child-raising benefit and schooling support. The child-raising benefit is granted for non-
school-age children while the schooling support is given for school-age children or older
children who continue their studies in institutions of public education, up to the child reaching
23 years of age. Schooling support is tied to school attendance, thereby incentivising
families to keep their children in education. Since the introduction of this measure,
absenteeism was reduced by 64%.
The timing of taking up employment after the birth of a child is strongly determined by the
availability of day-care facilities for young children. The government has introduced some
overarching reforms in this area as well. The conceptual transformation of the day-care
nursery system for children under the age of 3 aims to abolish the regional inequalities. The
new system is more demand-driven and gives the families the opportunity to choose among
the different new forms of day-care services. The number of nursery day-care places has
continuously increased 80% in the last decade. The number of day-care places reached
59 000 in 2022. The public nurseries are available for a very modest contribution from the
parents, making them affordable for all. From 2019, those parents who could not find a
public nursery place for their children are entitled to a monthly contribution of 100€ towards
the fee of the private nursery.
The program entitled “Women 40”, an old age pension for women having a 40-year
entitlement period without age restriction was introduced in 2011. The aim of this measure is
to give an opportunity for grandmothers to provide active support to their children primarily
in looking after their grandchildren.
According to our research, following physical and mental health and stable employment,
adequate housing is the third most important factor in the decision of families about the
number of their children. In 2015, the government introduced the Family Housing Subsidy
(CSOK), which is available for purchasing or building a new house or apartment and also for
purchasing and enlarging used properties. Basically, the amount of the subsidy depends on the
number of children. Families that are currently raising three or more children, or that
undertake to raise at least three children in the future (including the children they already
have) may receive a one-off in-cash support of approximately 33 000 € for a new house or
apartment. In addition, they are eligible to a 47 000 € residential loan with a state-subsidized
interest-rate. This cash support may even cover significant part of the price of the apartment
or house in question, making it a very significant incentive.
In 2019, the Hungarian Government decided to extend the Family Housing Subsidy for
families with two children. These families may receive a support of approx. 8400 € for a
new house. In addition, they are eligible for another approx. 33 000€ residential loan with a
state-subsidized interest-rate.
Starting in January 2021, the Government launched a significant housing programme in
order to help families maintaining their living standards throughout the COVID-19
epidemic and in parallel to boost the investment in the construction sector. The VAT of
newly built houses will be reduced by 22% (27%-5%); the government will reimburse that
5% VAT as well for families purchasing such houses/apartments within the CSOK hosing
programme. The 4% levy of buying a house/apartment will be abolished for CSOK properties.
Families building a two-generation house by creating an individual apartment in the attic will
be eligible for the full amount of CSOK. Any family raising a child under 25 years of age was
eligible for 50% of the cost (maximum 8600 €) of any renovation work done on the apartment
in 2021-2022. The corresponding fees charged by the public notaries are maximised as well.
These overarching housing programmes not only help families with children but in parallel
have direct positive impact on the construction sector’s growth and contributes to the growth
of employment in this sector as well.
The exposure to the risk of poverty gradually increases with the number of children within a
family. Therefore, social policy tools are implemented to make sure that having children does
not constitute a risk of poverty. The Hungarian government has extended the opportunity for
free or subsidised child catering. As of September 2015, free catering in nurseries and
kindergartens is extended to almost 60% of children, by that the measure does not stigmatize
any child. In those families, where 3 or more children or disabled children live, or where the
average income per capita is less than approximately 400 € monthly, parents do not have to
pay for their children’s catering. Free meals are also available during holiday periods. In the
framework of the free supply of school textbooks, as of the academic year 2017/2018,
primary school pupils receive their textbooks free of charge.
The government introduced the so-called Elizabeth Programme to ensure that those in need
also have holiday opportunities. In the first decade of the programme, 1 million participants
were offered holiday opportunities for a symbolic participation fee (0,30€/day). The main
target groups include pensioners, large families, persons with disabilities and children with a
disadvantaged background. The Programme offers an opportunity for Hungarian children
living in neighbouring countries to participate in summer camps in Hungary. Closures due to
the pandemic had been used for a complete modernisation of the facilities.
The Umbilical Cord Programme started in January 2018, targeting those Hungarians, whose
children are born abroad. In the framework of the scheme, families are eligible for the one-
time maternity allowance as well as a “baby bond” and the baby package.
The Hungarian government proclaimed 2018 as the Year of Families. With over 1,500
programmes and several hundred thousand participants, the subject has proven to be a huge
success, showcasing that living in a family even in a large family is fun and actually perfectly
normal. We believe that it is very important that we provide for a positive counter narrative
against the negative public image of families broadcasted by many Media actors.
The Hungarian government initiated a serious of measures addressing many different
situations of family life, “The Family Protection Action Plan”, came into effect in July 2019
/ January 2020 with the overarching aim to reach the ideal 2.1 fertility rate until 2030.
▪ Baby expecting subsidy: any married couple, where the wife is between the ages of 18
and 40, is eligible for an interest-free loan of max. 30 000 €. If the couple has a child,
repayment will be suspended for 3 years at the time of the birth of the child; while the
repayment will be suspended for another 3 years at the birth of a second child with 30%
of the outstanding debt released. The entire remaining amount will be released at the birth
of the third child. The subsidy was prolonged until 2024 without any change of criteria.
▪ Extension of interest-subsidized housing loan to buyers of second-hand housing: besides
new apartments, second-hand housing is also covered by the favourable loan with 3%
maximum interest rate, with an amount of 33 000 € for 2 children or 47 000€ for 3
children, when opting for the CSOK subsidy. Social security contribution paid abroad is
taken into account in order to attract back the young Hungarians working in the EU.
▪ Expanding the debt relief scheme for mortgages at the arrival of children: at the birth of
second children, the government will deduct app. 3000 € from the mortgages of families
and 8600 € at the birth of the third child (and another 3000 € in the case of further live
births).
▪ Personal income tax exemption for mothers with four or more children: From 1 January
2020, all mothers who currently raise at least 4 children or raised 4 or more children
during their lifetime are fully exempt from paying personal income tax until their
retirement.
▪ Car purchase support for large families: As of 1 July 2019, families with 3 or more
children may apply for a subsidy of 7000 € (but up to 50% of the purchase price) for the
purchase of a new car with at least 7 seats. (Due to the significant delay of the delivery of
the cars, the support was suspended as of 31 December 2022.)
▪ Nursery development program: The Government has decided to expand the number of
nursery places, so that any parent with a child aged under 3 can place their child in a
nursery if they wish to.
▪ Introduction of the Child Care Fee for grandparents: As of January 1, 2020, non-retired
grandparents can become entitled to the Child Care Fee with similar conditions as the
Child Care Allowance if they undertake to care for their grandchild at home instead of the
parent(s) who work. In such cases, the grandparent would be entitled to the Child Care
Fee instead of the parent to encourage them to participate more actively in caring for their
grandchildren, thereby relieving the parents.
So far, an interest beyond any expectation has manifested. More than 1 047 000
applications prove that the set of measures correspond to the everyday needs of Hungarian
families. This is entirely in line with the research of our Institute; as the vast majority of the
respondents agreed that the measures can help Hungarian families in having a predictable and
secure future in the long run. Whereby each possibility is highly supported, the most popular
among them is the nursery development, and the housing programme according to the
research of the Mária Kopp Institute. Some of the respondents even said, that these measures
changed their life, that they became more self-confident, and that they would not have had a
child without these possibilities. It is favourable, that more than half of the respondents said
they would like to have a child in the next five years.
During the COVID-19 pandemic, the government extended the eligibility period of the
above-mentioned family benefits, that would have expired during the emergency period for
families with small children. Moratoria have been introduced to any credit instalment
throughout the state of emergency, that was available by 31th December 2022 for those in
need, namely, for parents rearing children and those, whose income had been reduced
throughout the pandemic.
Contrary to what had been prophesized by many, family relations did not deteriorate
throughout the pandemic, but rather strengthened. According to the research of KINCS, the
epidemiological emergency strengthened relationships between family members, a
quarter of respondents (24 percent) reported improvements, 71 percent have
experienced no change, and only 4 percent felt their family relationships had
deteriorated since the outbreak of emergency. Forty-five percent of people said they were
able to spend more time with their family members.
New measures aided families in 2022 as well. Working parents – raising children under the
age of 18 years – were eligible to a reimbursement of their personal income tax payed in
- This measure aimed at helping families stocking up their finances after the long-lasting
effects of the pandemic. Both working mothers and fathers were eligible to the refund of
maximum 2300 €, by this measure a maximum of 4600 € has been reimbursed to Hungarian
families mid-February 2022. Due to the significant raise of the minimum wage and skilled
minimum wage as of January 2023, several family policy benefits, such as the Child Care Fee
are substantially higher in 2023. The so-called 13th month pension had been reintroduced
fully two years earlier than originally planned, and was paid out to pensioners in February as
well.
Measures aiming at mitigating the increase of utility costs due to the high energy prices
have been in place since 2013 already. Helping families to maintain their living standards in
the current energy and inflation crises, the government introduced several actions as well.
- Fuel prices have been capped in November 2021. Citizens (non-economic players)
enjoyed the significant reduction until 7 December 2022. - Despite skyrocketing energy prices, citizens may continue to purchase energy at
an authority set price below the level of the average consumption. Family size is taken
into account, as families raising 3 or more children are eligible for a higher amount of natural
gas at a reduced price. Every Hungarian family/household receives a monthly 450€
discount from the energy utility bills. Natural gas price is the lowest, electricity price is the
second lowest in Europe currently for consumers.
Prime Minister Viktor Orbán, who in his speech at the Third Budapest Demography Summit
said, and I quote: “We will win if we manage to build a family support system that ensures
that those who decide to have children are guaranteed better living standards than if
they decided not to have children. This will be the turning point: if deciding to have
children contributes to an improvement in your standard of living – not because your children
will look after you when you’re old, but here and now, immediately, when you’re a parent
still raising children. This is the point we are seeking this is what we want to reach, and this
will be the tipping point for the Hungarian family support system. But we are not there yet,
and it will need quite a few more years of persevering work.”
In line with the statement of the Prime Minister the building of the family friendly Hungary is
ongoing.
Prepared by the International Bureau of the
Mária Kopp Institute for Demography and Families
