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Jan 21, 2020 - Zoltán Kovács

A “global leader” in the field, Hungary expands family policy

It’s not just Hungarian families who recognize the importance of the Family Protection Action Plan, but other countries have also been talking about the innovative character of the program, the newest elements of which came into force on January 1.

The Family Protection Action Plan has been expanded via two new measures, which came into force January 1, 2020. First, women who have raised at least four children will benefit from a lifetime exemption from personal income tax (PIT), and second, grandparents are now eligible to receive subsidized parental leave.

“The exemption from PIT, which can affect 40 thousand mothers a year,” said Katalin Novák, state secretary for Family and Youth Affairs, in a recent interview, “can be enforced in parallel with the family tax benefit and applies even if a mother has lost one of her children.”

The monthly amount of the grandparents’ parental leave is capped at 70 percent of double the current minimum wage, which in 2020 would equal HUF 225,288. But if grandparents take care of more than one grandchild, they may receive a multiple of that amount.

The seven-point plan was first introduced by Prime Minister Viktor Orbán in his “State of the Nation” address in early February 2019. The new family policy, which came into force on July 1, includes measures such as loans for families who are expecting a child, a subsidy for car purchase and an extended loan program to support home purchase.

With the Family Protection Action Plan, Hungary endeavors to show that reversing negative demographic trends is possible.

But it is not just Hungarian families who acknowledge the benefits and innovations behind the Action Plan; countries around the world also recognize Hungary as a leader on this issue. Novák noted that Hungary’s family policy has generated growing interest.  On a recent visit to Washington, D.C., the state secretary met US Health and Human Services Secretary Alex Azar and held talks with her US counterpart as well as with members of Congress and also addressed an international conference on family policy.

The US has “noticed that there are countries that are ahead of them in this area,” said Novák, adding that “our American partners have told us that they believe Hungary is the global leader in this field.”