Katalin Novák, Minister for Families, said pensions will rise by 5 percent next year, thus avoiding a retroactive change to match higher-than-expected inflation.
Speaking on Kossuth Rádió on Sunday, the minister noted that pensions are indexed to inflation to protect the purchasing power of pensioners. If inflation is higher than the target, compensation for the increase is paid out retroactively, as it was this year, she said. As inflation is higher than expected this year, the government has brought forward the pension rise to match next year’s inflation, she added. Hungary’s economy is growing thanks to the decision of many people to look for work even during the depths of the coronavirus crisis, she said. Parents raising children are getting a rebate on their personal income tax taking into consideration this difficult period, she added.
Minister Novák said the government’s policy is based on allowing people who take on a larger part of the shared tasks to reap a larger return. That is the basis for the personal income tax exemption for under-25s and the payment of the full, annual pensioners’ bonus, she added. She said Hungary’s 2.5m pensioners will get their annual bonus – raised by 5 percent because of the inflation indexing – in February. While the opposition may call this “throwing money away”, she said “putting more money in the pockets of working Hungarians is the best investment”, adding that it is the government’s job to give back to working Hungarians through tax reductions, tax rebates and family subsidies.
Photo credit: Shutterstock