The Labor Law is one of the most important field of my expertise, therefore I find it very crucial to publish in this topic. The Labor Law (Employment) basically evolved from the general Civil Substantial Law and became an individual field of law. It gives the special feature of this field of law that it is in a fundamentally close relationship with the Civil Substantial Law but in some another legal institutions these are significantly different from the Civil Law. There are two laws which often regulate the Labor Law next to some other decree. These two laws are Act I of 2012 on the Labor Code and Act V of 2013 on the Civil Code. Firstly it has to apply to the Labor Code and secondly the Civil Code. All in all, the Civil Code appears on subsidiary basis in Labor Law. This means that what the Labor Code does not regulate, the provisions of the Civil Code has to be applied.
In this section, we are going to discuss articles related to the regulation of creation of employment relationship, changes of employment relationship and the termination of employment relationship. This part of the blog also includes those articles of personality rights which are in connection with athletes and regular employees who are working in the general labor relations.
Since General Data Protection Regulation (GDPR) entered into force, it has been especially important that personal data and personality rights of athletes and regular employees have to be handled securely. Thus in this heading, the articles of the Labor Law which are connected to athletes’ and regular employees’ personal data and personality rights are also published. These articles are related to the GDPR of the European Union (hereinafter: EU) decree and the Right to information self-determination and Freedom of Information Act.
Next to the aforementioned topics, in this section the following articles related to the damages liability of employers and the employees will be published as well. This heading includes articles and studies which are in connection with binding labor contracts and study contracts, with their content, labor wages, wage allowances (bonus) and all the articles which contain those topics that closely related to the Labor Law and Data Protection Law.

The Government Decree No. 142/2020 (22 April) on the Applicable Labor Law Provisions during the Epidemic Situation (COVID-19) (hereinafter: Government Decree or Decree) was published in the Hungarian Gazette Issue Vol. 83. on 22 April 2020, Wednesday. The different labor law provisions are determined by the Government Decree for the duration of State of Emergency until its withdrawal taking into consideration the information contained the information brochure of the Federation International Football Association (FIFA).

The decree confer the right to the sports organizations included in the sports system of the Hungarian Football Association (MLSZ) to reduce in their unilaterally written legal statement the regular monthly wages of the athletes who perform their sporting activity in labor relationship (or personal service relationship) or those sports professionals wages who are employed in labor relationship or employment-related other relationship.

In case of personal service relationship, the remuneration can be reduced if the remuneration will be payed as wage cost according to the Accounting Act.

The rate of the monthly wage reducing may not exceed 70%.

The monthly wage reducing is valid for the duration of the State of Emergency.

The source of the picture is Adobe Stock.

The Government Decree also contains similar provisions to the relevant decision of the national sports trade union operating in team sports and not covered by the above regulations.

The Government Decree will enter into force the day after its proclamation. Under these provisions these regulations shall be applied in the sports labor relationship from this day.

The effect of this Government Decree is prolonged by the Government for the duration of the State of Emergency.

The Hungarian Gazette (Magyar Közlöny) issue Vol 83. is available in Hungarian only.

Rules of paying Health Service Contributions

In Hungary, the Social Security is a social pooling system covering the citizens of Hungary and other natural persons working in Hungary. It means that every single person who works in Hungary has to pay for taking benefits. Pursuant to the Act LXXX of 1997 on the Eligibility for Social Security Benefits and Private Pension and the Funding for These Services (hereinafter: Social Security Benefits Act or SPA) the participation in the social security system is mandatory in accordance with this law.

The article is about the inpayment of the health service contribution and what kind of documents are need to the submission via of the system of the National Tax and Customs Administration (NTCA) to take the health care benefits. At the end of the article will be listed the relevant laws and decrees.

Who is entitled to benefits?

In Hungary the mandatory pay contribution is the basis of the right to benefits. The law determines that who is eligible to take those benefits which are comprised by the law. These persons are the following:

  • Insured persons [SPA Sec. 5 (1) points a)-k)];
  • Entitlements persons (e.g.: pensioner, students, scholars of schools and education institutions, mental patients and patients treated for pathological addiction in an institution of social therapy, etc.) [SPA Sec. 15 (1) and (2) points a)-f)];
  • Persons liable to pay health service contributions in accordance with the SPA Sec. 39 (2) [SPA Sec. 16 (1) point r)];
  • Social Security Benefits Provided Under Agreement [ SPA Sec. 34 (1)-(15)].

Who has to pay for health service contribution?

The SPA determines that who is required to pay health service contributions. These person are the following:

  • Persons liable to pay health service contributions in accordance with the SPA Sec. 39 (2);
  • Private Entrepreneurs engaged in auxiliary activities;
  • Business Partnerships on any Business partner who is engaged in auxiliary activities;
  • Social Cooperatives shall pay health services contributions on behalf of their members performing work within a member’s work relationship [SPA Sec. 18 (1) point c), Sec. 19 (4) and Sec. 39/B (1)]

Who is considered to be a resident in the view of social security? What conditions are need in additional to be eligible for health contribution services?

Pursuant to the SPA Sec. 4 (1) point u) resident shall mean the following:

  • Hungarian citizens who have their address in Hungary registered in accordance with Act LXVI of 1992 on Records of the Personal Data and Addresses of Citizens, persons who have been granted immigrant or permanent resident status and persons with refugee or subsidiary protection status,
  • persons falling within the scope of the Act on Admission and Residence of Persons with the Right of Free Movement and Residence (hereinafter referred to as “persons with the right of free movement and residence”), who exercise their right of free movement and the right of residence for a period of longer than three months in the territory of Hungary, provided that they have their address registered in accordance with the Act on Keeping Records on the Personal Data and Address of Citizens, and
  • stateless persons.

It is very important for the applicant to be eligible for one of the aforementioned requirements to submit his/her submitting form.

In addition to the above-mentioned conditions, the natural person shall have registered address in the territory of Hungary prior to admission for at least one year without any interruption or in the case of stateless persons who have a residence permit, a registered habitual residence provided for in the Act on the Admission and Residence of Third-Country Nationals. The said one-year period shall include a maximum period of ninety days, during which the resident person did not have a registered address in the territory of Hungary. The state tax authority, if it has no records concerning the said one-year period, shall contact the central body operating the register of personal data and address records of citizens, or the body operating the immigration register as relating to the habitual residence, to request information as to the home address of such resident person for the purpose of determining contribution payment liability. [SPA Sec. 39 (3)]

The provision means that the particular natural person has to be a residence place or habitual residence to be determining his/her contribution payment liability.

What is the time limit in connection with the health service contribution?

A) Beginnings of the contribution payment obligation

The obligation of health service contribution shall be applied for the period beginning on the day following the day of loss of eligibility for health services and ending on the first day of the relationship that is subject to compulsory insurance. [SPA Sec. 39/A (1)]

This provisions briefly means that the natural person (applicant) fell out of the sphere of the health services and compulsory insurance entitlements, and therefore he/she has to pay health service contributions until he/she will not regain the entitlement to the health services, compulsory insurance, or those entitlements which are listed in the law.

B) Reclaim of the health service contribution paid

If the obligation of joining to insurance scheme has generated later than the health service contribution payed, the contribution paid during the life of the insurance relationship may be refunded upon request with the certificate which was issued by the employer. This certificate shall be submitted to the National Tax and Customs Administration (NTCA). [SPA Sec. 39/A (2)]

C) Enter and cancel of the health service contribution

The health care contribution payer shall notify the NTCA regarding the commencement and termination of payment obligations within 15 days. Based on this notification, the NTCA shall prescribe the monthly payment obligations for the tax year on the tax account, keep records of the payments received, and shall cancel contribution payment obligations in the case provided for in this Act or in another act. The NTCA also shall issue a tax identification code to the contribution payer who does not have one. [SPA Sec. 45/A (1)]

The contribution payer shall not be required to notify the termination of payment obligations of health service contribution (see below to the next point), if this payment obligation is terminated by entering into the insurance relationship and that was notified to the NTCA in accordance with the RTA. The national tax authority shall ex officio inform the contribution payer in connection with termination of his/her obligation to pay health service contribution. [SPA Sec. 45/A (2)]

So this provisions mean that the contribution payer has 15 day to notify (submit his/her form) the national tax and customs authority about his/her obligation of health service contribution. This is the same situation when his/her obligation of health service contribution is terminated. The Subsection (2) also describes that if the contribution payer enter into the insurance relationship, the authority will automatically inform the contribution payer, if it happens in the way as the RTA prescribe it. For instance: the employer will notify the authority about the commencement of the insurance relationship.

Relying on the notification regarding to the termination of the obligation of the health service contribution, which was sent to the national tax and customs authority, the tax authority shall supply data concerning the ceased obligation to pay health service contribution within 10 days by way of electronic means to the Health Insurance Fund. It will happen when the contribution payer notify the authority about the commencement of entering into the relationship that is subject to compulsory insurance. [SPA Sec. 45/A (2)]

D) Passive eligibility period (suspended period)

After the termination of the relationship that subject to compulsory insurance, the passive period eligibility is behooved to the insured person for a while. These conditions are regulated by the Act LXXXIII of 1997 on the Services of the Compulsory Health Insurance System (hereinafter: HIA) Sec. 29 (9).

According to the HIA Sec. 29 (9) the entitlement of a resident person provided for in the SPA to health care services in the following time periods:

a) shall remain in effect for a period of 45 days, if the eligibility criteria was satisfied without any interruption for a period of at least 45 days before the time of termination,

b) if the period of existence of the eligibility criteria was less than 45 days, entitlement to healthcare services shall be extended by that time,

c) shall remain in effect for a period of 45 days, if the eligibility criteria previous to the eligibility criteria that was terminated was satisfied without any interruption for a period of over 45 days, and the eligibility criteria that was last terminated did not prevail for a period of 45 days, however, the period between the existence of the two eligibility criteria was less than 30 days.

This provision means briefly that in spite of the ceasing of the insurance relationship of the insured person he/she will entitle to take health care services for 45 days. During this time the social security relationship shall be settled by the insured person.

Who has to pay the health service contribution?

Pursuant to the law any resident person who is not insured and is not entitled to receive health services shall be required to pay health services contributions. [SPA Sec. 39 (2)]

How much HUF health service contribution shall be paid in 2020?

THE TOTAL AMOUNT OF HEALTH SERVICE CONTRIBUTION THE DAILY AMOUNT OF HEALTH SERVICE CONTRIBUTION
7710 HUF/MONTH 257 HUF/DAY
[SPA Sec. 19 (4)]

Time period for payment of Health Service Contribution

The health service contribution shall be paid by the contribution payer: 12th of each month.

Right to Health Care Service

To be eligible for health care service, it must be comply to the particular provision of Act III of 1993 on Social Administration and the Social Service (SASA).

Pursuant to the SASA Sec. 54 (1) the district office determines the social need for the purpose of health care service to that person:

  1. in whose family, the monthly income for one person is 120% of the minimum amount of the old age pension;
  2. who lives alone and his/her income is 150% of the minimum amount of the old age pension and his/her family has no assets.

The official certification of the social need (aka. certification) is issued by the district office. The expiration period of the certification is 1 year. The certification contain the name, the address, in the case of stateless person holding habitual license, the habitual residence, social security identification code of the person in need, the fact of the social need (indigence) and expiration of the certification.

If the aforementioned conditions are still met, the certificate can be reissued. The certificate testify the social need from the date of the submission of the application. The district office keeps record about the persons in need and pursuant the separate law notify the NEAK (National Health Insurance Fund of Hungary aka. NEAK).

Briefly, pursuant to the SASA the eligibility for health care services are benefits which are belonged to the benefits in kind. This benefit provides the free use of the health care services without paying the health service contribution.

What kind of documents are need for submission?

The following documents are needed for submission:

  • identification card
  • residence card
  • passport
  • tax ID card
  • social security ID card
  • power of attorney
  • submission form 20T1011 (it shall be submitted to the national tax authority)

What changes can be waited for in the near future?

The new social security act (Act CXXII of 2019 on the Eligibility for Social Security Benefits and Private Pension) will enter into force on 1st July 2020. The changes will be described later in this year.

Who conducts the social security system?

The social security system is a multistage system. It is divided by two parts: for health insurance and the pension insurance. These parts create the whole system. This article only deals with the issues of the health insurance.

The issues of the health care and health insurance system are belonged under the control of National Health Insurance Found of Hungary (NEAK).

In countryside, the issues of the health insurances are performed by the district office by the country seat.

In Budapest, the same duties are performed by Budapest Government Office XIII. District Office (together: District Office of the Country). [Government Decree 386/2016 (2 Dec) on the Bodies of Health Insurance Sec. 1 (1) points a), b), c)]

The relevant laws and decrees

Act LXXX of 1997 on the Eligibility for Social Security Benefits and Private Pension and the Funding for These Services

Act LXXXIII of 1997 on the Services of the Compulsory Health Insurance System

Act III of 1993 on Social Administration and the Social Service

Act LXVI of 1992 on Records of the Personal Data and Addresses of Citizens

Government Decree 168/1997 (X. 6.) on implementation of Act LXXXI of 1997 on Social Security Pension Benefits

Government Decree 386/2016 (2 Dec) on the Bodies of Health Insurance

Zoltán Ferenc Samkó J.D.
Health and Sports Lawyer


The enforcement of the claim of orphan’s benefits.

Pursuant to the SSPA Sec. 64 (1) applications for pension benefits shall be submitted in writing, using the prescribed form or standard electronic form (hereinafter referred to as proof of claim form). This action constitutes as an application under the Act CL of 2016 on General Public Administration Procedures (hereinafter: GPAP) Sec. 35 (1). The entitlement of pension benefits is related to the person of the rightholder, therefore it can not be enforced by nobody nor the successor and the spouse. Procedures relating to the enforcement of claims for benefits available under the social security system and other proceedings under this Act shall be exempt from duties and charges. It shall mean that the conducting of the procedure which is regulated in the Act XCIII of 1990 on the Duties (hereinafter: Duties Act) can be initiated without any obligation of paying duties.

The proof of claim form can be downloaded from the website of Hungarian State Treasury, under the code number K11.

Pursuant to SSPA Sec. 64. (2) Claims may be enforced retroactively for maximum 6 months, meaning that benefits may be established – if all conditions for entitlement are satisfied – as of the first day of the sixth month preceding the date of filing the proof of claim. The claim shall be adjudged according to the legal regulations in force on the date of commencement of benefits.

It shall be attached to the proof of claim form:

  • the death certificate of the deceased rightholder or the court ruling declaring the rightholder dead or missing;
  • the fully enforceable acknowledgement of paternity by the guardian authority (it can be any government office or district office);
  • the birth certificate of the pension claimant;
  • the certificate of the service time by the employer (it shall mean that certification which is issued by the employer to certify the existence of employment relationship. It also certify the time when the employee was in the employment relationship with the employer and out of his/her wages the pension contributions were paid by the employer.);
  • In case of private entrepreneurship, those certifications which are available on the register of pension insurance administration agencies (These can be queried from the customer site ,,Ügyfélkapu”.);
Source: pexel.com

It shall be considered as service time the period of the insurance relationship after 31th December 1997. Furthermore pursuant to the Government Decree 168/1997 (X.6.) Korm. on implementation of Act LXXXI of 1997 on Social Security Pension Benefits Sec. 29 (1) the employment, public and civil servant relationships, service relationships, periods of studies in vocational training schools under scholarship or apprenticeship agreement are considered as service time too.

Pursuant to the Government Decree 168/1997 (X.6.) Korm. on implementation of Act LXXXI of 1997 on Social Security Pension Benefits Sec. 32 (1) it also shall be taken account as service time the following elements down below.

(1) The following periods shall be recognized as service time:

a) when receiving sick-pay (benefits while on sick leave), benefits for accident-related injuries or compensation aid, pregnancy-maternity benefits, medical treatment allowance, temporary invalidity benefits and temporary invalidity allowance;

b) when on maternity leave; and

c) when receiving child-care benefits or child-care allowance.

(2) Service time shall also include periods of hospitalization if admitted during the service time or within thirty days subsequently. One year additional service time (two years in connection with tuberculosis) may be recognized on the grounds of hospitalization after the insurance was terminated or after any other service time acquired on other grounds.

It must also be attached:

  • those judicial decisions which were made within 6 months in case of the orphan’s up to 50 percent disability or rehabilitation benefit in connection with his/her health status. In lack of this, the orphan’s documents which are related to the health status of the orphan, if the orphan requesting orphan’s benefits relating to he/she is a person with reduced ability to work.
  • the school attendance certification in case of the orphan’s over sixteen years of age.

The proof of claim is valid with signature only, in lack of this, it will not be considered.

The place of the filing of the proof of claim.

Source: pexel.com

As of 1 November 2017, the Central Administration of National Pension Insurance (ONYF) merged into the Hungarian State Treasury (MÁK). The proof of claim shall be submitted or sent to the competent Pension Payment Directorate of the Hungarian National Treasury or pension insurance administration agencies of the claimant’s (applicant’s) place of residence.

The pension insurance administration agencies.

The Government Decree 168/1997 (X.6.) Korm. on implementation of Act LXXXI of 1997 on Social Security Pension Benefits Sec. 1 lists the pension insurance administration agencies:

(1) The Government appoints the following bodies to function as pension insurance administration agencies:

a) the district (Budapest district) offices provided for in Annex 1 of Budapest and county government agencies (hereinafter referred to as “district office”);

b) Budapest and county government agencies, with the exception of the Pest County Government Agency (hereinafter referred to as “government agency”);

c) the Magyar Államkincstár (Hungarian State Treasury) (hereinafter referred to as “Treasury”) Nyugdíjfolyósító Igazgatóság (Pension Payment Directorate) (hereinafter referred to as “Pension Payment Directorate”);

d) the central body of the Treasury (hereinafter referred to as “Head Office”).

(2) The Government appoints the Pension Payment Administration to function as the pension pay-out agency.

(3) The Government delegates the Head Office to function as the central pension insurance agency.

According to the Government Decree 168/1997 (X.6.) Korm. on implementation of Act LXXXI of 1997 on Social Security Pension Benefits Sec. 2 (1) the district offices shall function as a general pension assessment bodies. Unless otherwise provided for by law, the competence of general pension assessment bodies shall cover the areas specified in Annex 1.

District VIII Branch of the Government Agency of the City of Budapest acting as the general pension assessment body for the City of Budapest and the County of Pest, responsible for the City of Budapest and the County of Pest.

Annexes related to the proof of claimant.

The Annex 3 of the Government Decree 168/1997 (X.6.) Korm. on implementation of Act LXXXI of 1997 on Social Security Pension Benefits comprise the applicable percentage of calculating for dependent’s benefits the dependent’s benefits.

The Annex 4 of the Government Decree 168/1997 (X.6.) Korm. on implementation of Act LXXXI of 1997 on Social Security Pension Benefits comprise the rules which are related to the data content of the form of the claim.

The current jurisdiction.

Unified Judicial Decision No. 2011. 2354 The claim of pension will not be expired, the lost of the right to the claim is not the legal consequence of the  late enforcement nor the service dependent’s (retirement) benefits.

Curia Decision No. Mfv. 10.789/2016/14. The determining of six month retrospective claim for benefits shall be applicable only, if the claimant make statement relating to this during the official procedure.

Metropolitan Administrative and Labor Court Decision No. M.662/2012/8. During the started lawsuit against the administrative decision (resolution) on the dependent’s benefits establishes the judgement of the court, if the essential ascertainment’s of the forensic medical expert’s reports are in correspondence with each other during the official procedure.

Metropolitan Administrative and Labor Court Decision No. M.408/2011/15. If the view of point of the forensic (medical) expert diverge well reasonable from the expert’s opinion which were made in the official procedure, the secondment of the newer expert is unnecessary (for example: it is accurately marked that which disease was not taken into account during the official procedure).

Here is some information about the reorganization of the Hungarian social security system. This document was made by the Hungarian State Treasury.

Sources.

Commentary on Act LXXXI of 1997 on Social Security Pension Benefits, Edited by Áron Pánczél. Budapest, Wolters Kluwer (Nagykommentár a társadalombiztosítási nyugellátásról szóló 1997. évi LXXXI. törvényhez – Szerkesztette: Pánczél Áron. Budapest, Wolters Kluwer – Jogtár)

Act LXXXI of 1997 on Social Security Pension Benefits

Act LXXX of 1997 on the Eligibility for Social Security Benefits and Private Pensions and the Funding of These Services

Act CL of 2016 on General Public Administration Procedures

Government Decree 168/1997 (X.6.) Korm. on implementation of Act LXXXI of 1997 on Social Security Pension Benefits

This article is written about a particular kind of dependent’s benefits, the orphan’s benefits. This legal institution is very special, therefore it is regulated by more laws and decrees.

The article consists of two parts: the first parts contains the basic notions and the features of the orphan’s benefits. The second parts discuss the enforcement of claims of the orphan’s benefits and its procedural regulations.

Some current judicial practices were listed at the end of both parts of the article in connection with this topic.

The concepts of dependent benefits.

The dependent benefits shall mean regular payments of money calculated upon the income of the insured person (formerly insured person), or his relative, consistent with his service time.

The dependent’s benefits are provided to the insured person under the frame of the social security pension system.

The service time.

The concept of the service time is determined by the Act LXXXI of 1997 on Social Security Pension Benefits (hereinafter: Social Security Pension Benefits Act or SSPA) Sec. 4 (1) point h).

According to the SSPA Sec 4 (1) point h) service time shall mean the periods when the insured person was required to pay pension contributions, or paid pension contributions under a voluntary arrangement. The periods of service time free from any obligation of payment of pension contributions shall be laid down in specific other legislation.

The family member required and capable to provide maintenance.

According to the SSPA Sec 4 (1) point i) the family member required and capable to provide maintenance shall mean a person legally required to provide maintenance to an orphan’s pension creditor and/or a parent’s benefit creditor – consistent with the chain of maintenance obligation – before the deceased rightholder 

ia) who was ordered by court to provide maintenance to the orphan’s pension creditor and/or the parent’s benefit creditor as due, or 

ib) whose per capita income in the family exceeds two and a half times the mandatory minimum amount of full old-age pension benefits according to Act III of 1993 on Social Administration and Social Welfare Benefits, except if not required – by decision of the court – to provide maintenance to the orphan’s pension creditor and/or parent’s benefit creditor, with the proviso that a person whose whereabouts is unknown shall be considered incapable to provide maintenance; 

The concepts of orphan’s pension.

Pursuant to the SSPA Sec. 4 (1) point f) orphan’s pension shall mean the benefits paid to the children or adopted children of a deceased pensioner or of a person with pension rights who does not receive pension, or to their foster children, brothers and sisters or grandchildren subject to specific conditions.

The SPA Sec. 6 (2) list kinds of dependent’s benefits which are provided under the frame of the social security pension system. These are the follows:

a) widow’s pension;

b) orphan’s pension;

c) parent’s benefits;

d) accident-related dependent’s benefits;

e) widow’s benefits.

The requirements of entitlement.

The requirements of entitlement of the dependent’s benefits are regulated by the SSPA Sec. 46, Sec. 54 (1)-(3) and Sec. 55 (1)-(5).

Regarding to the entitlement, the SSPA Sec. 54 (1) refers to the contents of the SSPA Sec. 46. Pursuant to this provision, orphan’s pension shall be available to any children – born in wedlock or in a domestic partnership and raised together in the same household -, whose parent satisfies the requirements set out in Section 46 applicable to the deceased spouse.

The SSPA Sec. 46 ascertains the following:

(1) Widow’s pension shall be available to a person whose spouse died while drawing old-age pension or whose spouse died: 

a) before reaching 22 years of age and 

aa) who obtained service time within 180 days upon the conclusion of his/her studies, or 

ab) a total of at least 2 years of service time; 

b) after reaching 22 and before reaching 25 years of age, and acquired at least 4 years of service time; 

c) after reaching 25 and before reaching 30 years of age, and acquired at least 6 years of service time; 

d) after reaching 30 and before reaching 35 years of age, and acquired at least 8 years of service time; 

e) after reaching 35 and before reaching 45 years of age, and acquired at least 10 years of service time; 

f) after reaching 45 years of age, and acquired at least 15 years of service time.

(2) Furthermore, any person whose spouse did not acquire the service time prescribed in Subsection (1) shall be entitled to widow’s pension if his/her spouse acquired to service time prescribed for the lower age group and if his/her service time is not interrupted subsequently for any period of thirty days of more until the time of his/her death. This thirty-day period shall not include any period of incapacity to work. 

According to the SSPA Sec. 46 (3) the following periods shall be acknowledged as service time for the purpose of eligibility for widow’s pension: the period during which the deceased rightholder had been drawing invalidity benefits, accident-related disability benefits or invalidity allowance.

Pursuant to the SSPA Sec. 54 (2), orphan’s pension shall not be available to an adopted child by way of his/her biological parent, except if the child was adopted by the spouse of his/her biological parent. The Subsection 3 states that, orphan’s pension shall be available to a brother or sister, or a grandchild (including great-grandchildren and great-great-grandchildren) if he/she was supported by the deceased person in his own home, and if the child does not have any relative who is able and willing to support him/her.

By the way it is good to know that the Payment of orphan’s pension to the children referred to in Subsection (3) of Section 54 of the SSPA shall be suspended – from the first day of the month following the date of delivery of the relevant resolution of the first instance – if the relative liable to provide support becomes able to support them. [Government Decree 168/1997 (X.6.) Korm. on implementation of Act LXXXI of 1997 on Social Security Pension Benefits Sec. 64 (1)]

Source: pexel.com

The period (availability) of orphan’s benefits.

The period (availability) is determined by the SSPA Sec. 55 (1)-(5).

Orphan’s pension shall be available – if the conditions for entitlement are satisfied – as of the day of the death of the deceased person until the child’s sixteenth birthday.

If the child is pursuing a full-time course of study or participates in full-time education and training in a higher education institution, orphan’s pension shall be provided for the duration of studies, up to the child’s twenty-fifth birthday. If the child’s ability to work has diminished within the period of entitlement, orphan’s pension shall be provided for these periods independent of age.

It is very important if the orphan is older than twenty-five years old at the death of the person referred to in Section 54, the orphan’s benefit can not be granted for him/her. The earlier granted benefit – depending on the full-time course of study – will ceased. There is a an exception when the orphan is supported in orphan’s pension and he/she was a person with reduced ability to work at the time when he/she 25 years old.

In this case the orphan will be supported with the orphan’s benefit until he/she is qualified as a person with reduced ability to work. It is very important to know that if the orphan’s benefit is terminated due to health improvement, it can not be determined above the age of 25 again even though if the orphans health begins to deteriorate later.

The Head Office (the central body of the Hungarian State Treasury; hereinafter: Treasury) can ascertain special benefit in exceptional case, equity if the orphan at the death of deceased rightholder, is older than the age of 25 and he/she is pursuing a full-time course of study or participates in full-time education and training. The Head Office also extend the right to special orphan’s benefits in its power of equity regarding to the former death of deceased rightholder and the studies of the child, if the entitlement of him/her was existed before the age of 25 of the orphan.

If the child’s ability to work has diminished within the period of entitlement, orphan’s pension shall be provided for these period independent of age.

The child or his/her parent’s marriage shall have no bearing on entitlement to orphan’s pension, nor if the child is adopted.

On the grounds of schooling entitlement to orphan’s pension shall be granted to a child who: 

  • pursues studies as a student with individual study arrangement due to an illness or physical or mental handicap, pregnancy, childbirth or to caring for his or her child under 3 years of age; 
  • is below the age of 25 and pursues studies within the framework of adult education, provided that such adult education is provided by means other than distance education, and the weekly number of classes reaches seven in the average.

It is very important to note that on the grounds of schooling, orphan’s pension shall be granted until the end of the last month of studies, including the period of summer school-break as well. The legislator intends to use this rules to help the parent and the child in need of care in the same household making the coverage of child-raising costs easier during the child studies.

The SSPA also includes those rules which are in connection with the orphan studies. This rules describes the verification process of the entitlement of orphan’s benefits in connection with the orphans studies.

In connection with orphans studying in Hungary, the body operating the public education information system or the higher education information system shall verify the commencement and existence of the student relationship and the estimated time for the conclusion of studies at the request of the pension insurance administration agency, and shall ex officio verify the suspension or termination of student relationship, indicating the student’s name and social security identification code and the length of the time of suspension or termination. So, in this case, the claimant (applicant) has no individual action.

In the case of orphans studying abroad, school attendance shall be verified once a year if attending a secondary school and semi-annually if attending an institution of higher learning within one month from the date of commencement of studies.

Where the studies of a student of a secondary school or institution of higher education are suspended due to the student’s illness or giving birth to a child, this shall have no bearing on entitlement to orphan’s pension.

Source: pexel.com

The amount of benefits.

The amount of the orphan’s benefits are determined by the SSPA Sec. 56 (1)-(4).

Orphan’s pension shall be thirty per cent per child of the old-age pension benefits to which the deceased person had been or should have been entitled at the time of his/her death. The Government Decree 168/1997 (X.6.) Korm. on implementation of Act LXXXI of 1997 on Social Security Pension Benefits Sec. 64/D states the following: the mandatory minimum amount of orphan’s pension assessed for periods between 31 December 2007 and 1 January 2020 shall be 24,250 forints per month.

Pursuant to the SSPA Sec. 59 if there are several orphan’s, they each receive the amount due under the law. In contrary with the widow’s pension, the orphan’s benefit will not be shared. [SSPA Sec. 51, 59]

Summarize the above-mentioned facts, the mandatory minimum amount of orphan’s pension shall be thirty per cent per child of the old-age pension benefits but at least the aforementioned 24,250 forints per month.

Sixty per cent of the pension and benefits referred to in Subsection (1) shall be paid as orphan’s pension to a child: 

a) if both parents have died,

b) whose parent’s ability to work has diminished.

If a child is entitled to orphan’s pension in connection with both parents, the orphan’s pension that is more favorable shall be paid.

Person with reduced ability to work.

Pursuant to the SSPA Sec. 4 (1) point k) person with reduced ability to work shall mean a person whose health had deteriorated by up to 50 per cent. The rules of person with reduced ability to work are determined by the Act on the Benefits Provided to Workers with Disabilities and on the Amendment of Certain Acts (Act CXCI of 2011).

The current jurisdiction.

Judicial Decision No. 17/2000. (V.26.) It is not unconstitutional that the entitlement of the orphan’s benefit is bound to the service time. On the one hand the State is not obligated to provide solution of social security for every single life situation. The Social Security Pension System is only one of the type of the subsistence benefits. On the other hand the orphan’s benefit is ground on the entitlement to old-age pension of the deceased rightholder, it depends on, therefore the orphan’s of those who acquired the necessary service time and those without it, can not be taken account to be a homogeneous group. So, it can not to be talked about discrimination too. 

Decision No. 867/B/1997. (Constitutional Court) It is not unconstitutional that the orphan’s benefit – if the orphan is not a person with reduced ability to work – will terminated at the age of 25 because the provisions of child protection constitutional proclamation does not create individual entitlement.

Judicial Decision No. 2004. 1065. There is no orphan’s benefit for person with reduced ability to work, if he/she is older than the age of 25 at the time of death of the rightholder.

Metropolitan Administrative and Labor Court Decision M.3325/2006/10. It is not chargeable taking the orphan’s benefit for the orphan, if he/she can verify that he/she made the notification and even so the Nyufig (Pension Payment Directorate) has not terminated the transfer.

Sources.

Commentary on Act LXXXI of 1997 on Social Security Pension Benefits, Edited by Áron Pánczél. Budapest, Wolters Kluwer (Nagykommentár a társadalombiztosítási nyugellátásról szóló 1997. évi LXXXI. törvényhez – Szerkesztette: Pánczél Áron. Budapest, Wolters Kluwer – Jogtár)

Act LXXXI of 1997 on Social Security Pension Benefits

Act LXXX of 1997 on the Eligibility for Social Security Benefits and Private Pensions and the Funding of These Services

Act CL of 2016 on General Public Administration Procedures

Government Decree 168/1997 (X.6.) Korm. on implementation of Act LXXXI of 1997 on Social Security Pension Benefits