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Social protection system of the older people in general

Country

Hungary

GDP at market prices. Purchasing Power Standard per inhabitant, 2011

16 500

Pension expenditure,  % of GDP, 2010

11.3%

Expenditure on care for elderly, % of GDP, 2008

0.3%

At-risk-of-poverty rate, age group 65 years or over, 2011

4.5%

Old-age pensions

Basic principles

Dual system for the active population consisting of (1) the pure pay-as-you-go scheme and (2) a funded pillar:
1st pillar: compulsory state pension scheme financed by contributions (PAYG) with earnings-related benefits depending on contributions and the duration of affiliation;
2nd pillar: voluntary fully funded scheme run by private pension funds supervised by the state providing benefits linked to the accrued pension capital. Note: the second pillar, private funds have been closed in two steps in 2011-2012 and all the funds went to the state without any compenstation to the Funds’ members.

As of 1 January 2012, insured persons pay a 10%-pension contribution to the 1st-pillar Pension Insurance Fund even if they are members of one of the private pension funds.

Old-age pensions

Legal retirement age in standard case

Unisex 62 years of age in 2009.

Retirement age is gradually increased (by half a year for every age cohort) since 2010, reaching age 65 in 2022 for those born in 1957 and after. The first persons concerned by this increase are those born in 1952.

Financing principles for old-age pensions

1st pillar: contributions (insured persons and employers) and taxes.
2nd pillar: contributions to the private pension funds are terminated for 2012. Members of the private pension funds are also obliged to pay pension contribution to the state-managed pension fund.

Benefits for older unemployed

Job-seeker Aid Before Pension (Nyugdíj előtti álláskeresési segély) for older persons.

Financing systems for long-term benefits

Case of  old-age benefits

1st pillar: current income financing (‘pay as you go’)
2nd pillar: terminated, does not exist anymore

Health care

Basic principles

Compulsory social insurance scheme for the active population (employees and self-employed) and assimilated groups, financed by employer and employee contributions.

Health care

Benefits for prosthesis, spectacles, hearing-aids

The Health Insurance Fund (Egészségbiztosítási Pénztár) subsidies 50%, 70%, 80% 90% or 98% of the price or 50%, 70%, 85% or 100% of the rental fee depending on the type of the prosthetic device in question. 100% coverage for all victims of employment injuries and occupational diseases.