Raising children, work, making a living. Do these three concepts make sense next to each other? In today’s accelerated world, more and more people are concerned about when and under what conditions they can return to the labour market after the birth of their child, and what benefits they can expect to receive if they raise children. Important information for prospective parents and employers!
Act CCXXIV of 2013, as adopted by Parliament, on the amendments relating to the reorganisation of child care benefits and the expansion of the relief on social contribution tax was promulgated on 18 December 2013. The package that became known as the “extra child care benefit” (“GYED extra”) aims to make the family model with several children more attractive as well as improve the conditions for raising children, and, targeting parents with young children, for their return to the labour market.
Benefits
Based on regulations prior to 1 January 2014, those entitled to benefit were permitted to claim only one child-care benefit, regardless whether they were possibly entitled to benefits for more than one child. Pursuant to the amendment, if another child is born while child-care benefits are still paid, the previous benefit will not cease, the amount will continue to be paid during the entire period of the entitlement as of 1 January 2014. Parents will be entitled to receive a maximum of two child-care benefits concurrently for their children living in the same household. In contrast to the general rule, when twins are born, parents are entitled to receive child-care benefit for one year more, i.e. until the children reach the age of 3.
The amendment extends the entitlement to child-care benefit to full-time students in higher education too. Those who have at least two active semesters with student status in daytime courses of Hungarian basic higher education, advanced vocational training, specialised further training, master education and PhD education 2 years prior to the birth of the child will be entitled to child-care benefit too. A further benefit is that a woman giving birth to a child within 1 year of suspending or terminating her student status will be entitled to child-care benefit as well. The assessed child-care benefit is paid from the date the child is born up until the child turns 1. These regulations relate to benefits requested for children born after 31 December 2013.
Employment
Prior to 1 January 2014, working whilst drawing child-care benefit was not permitted, or just a maximum of 30 hours per week was allowed when receiving child care benefit after the child turned 1. From 1 January 2014, based on the amendment, there are no limits to working after the child turns 1, and child-care benefits will continue to be paid if entitled.
Tax allowances
Employers will be entitled to deduct tax allowances from their social contribution taxes related to parents raising three or more children, who used to receive or still receive various types of child-care benefits, and employees who used to receive or still receive child-raising support (gyet); this is based on the gross salary, but a maximum of HUF 100,000, as follows:
• 27% in the first 3 years of employment, and
• 14.5% in the 4th and 5th years of employment.
It is important to note that the employer may only claim the afore-mentioned tax allowance when in possession of the statutory certificates.
