Hungary. 1. Overview

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1 2015 Annual National Social Report - Report on the reform measures and policy initiatives designed and implemented in the period from June 2014 to April 2015 Hungary 1. Overview After the parliamentary elections in spring 2014, the Government was reshuffled in some areas. As a result, the two sectors that used to be responsible for social inclusion and social affairs within the Ministry of Human Capacities, which is responsible for the three major areas of social protection, namely, the fight against poverty and social exclusion, pensions, and the health and long-term care systems, were merged into the State Secretariat for Social Affairs and Social Inclusion, and the State Secretariat responsible for Family and Youth was created. The most important macro-economic data are reported in Convergence Programme. Referring to Chapter IV.5 Social inclusion of Hungary's 2015 National Reform Programme, it can be concluded that the deterioration of the country's general social conditions caused by the global financial and economic crisis stopped in the last few years, in fact, a good part of the indicators has showed some improvement. The latest data show that the polarization of the society and the increase of the inequalities experienced since 2010, which always remained at a level below the EU average, have stopped (S80/S20 Eurostat 2010/11/12/13/14: 3.4/3.9/4.0/4.2/4.2). It can also be seen that the high poverty risk groups have somewhat changed. While, previously, children, young persons, those living in a family with the family head holding only primary school qualification, families with a single parent, families with many children, those living with an inactive or unemployed family head, as well as the Roma were the most vulnerable, the latest data show that only those living in a family with the family head holding only primary school qualification, families with many children, households with an inactive or unemployed family head, households with only one employed person (the family head), as well as the Roma are considered to be at a high poverty risk. The proportion of working poor people with children has increased 1. However, this is primarily due to the fact that many of those who used to live on social benefits are now considered to be employed owing to the public works, so they are also included in this indicator. In order to improve the situation of low income families with children, the Government introduced the family contribution allowance in 2014, meaning that the family tax allowance can be deducted not only from the basis of the personal income tax (PIT) (the gross wage), but also from the individual contributions (in-kind and cash healthcare contribution and pension contribution) subject to meeting the eligibility criteria. Introducing the family contribution allowance significantly increases the net wage of those who were unable to claim the total tax allowance available to them. Similarly, the reclassification of those involved in public works in the category of employed persons is also the reason for that, although the proportion of the in-work poor people who are working 2 is generally low, the proportion of in-work poverty or people with low work intensity ( ), but are not considered as working poor people, has increased 3. As an important social protection reform implemented during the reporting period, the transformation of the social benefit system (see Chapter III/4 of the NRP) entered into force in March 2015, while the reorganisation of the primary healthcare services on new basis is currently designed 1 The Eurostat figure was 6.5% in 2012, 7.9% in 2013 and 8.2% in The Eurostat figure was 5.3% in 2012, 6.6% in 2013 and 6.4% in The Eurostat figure was 34.6% in 2012, 41.5% in 2013 and 43.3% in 2014.

2 and implemented, and the remodelling of the financing of specialised outpatient care (see Chapter V.1. NRP) should also be mentioned. Chapter I Introduction of the NRP also referred to that the development of certain policy reform efforts was mostly preceded by the social consultation required by the law and, in the case of the measures involved in the EU programmes, social consultation took place both during the planning and the selection processes in accordance with the utilisation procedures. The implemented reform measures are continuously monitored. 2. Delivering on the EU2020 poverty and social exclusion target Chapter IV.5 of the 2015 NRP gives a detailed account of the actions taken by the Government for social inclusion and the positive changes of the main indicators over the recent period. Overall, it can be declared that, compared to previous years, we have made some progress in shaping the trend that can be observed in the level of exposure to the risk of, and the number of those exposed to, relative income poverty and social exclusion. 3. Policy reforms for the period Recent reforms and policy initiatives in social inclusion See Chapter IV.5 of the NRP for details. In addition, we highlight the following important measures and policy initiatives: 1. Renewal of the Hungarian National Social Inclusion Strategy, and development of the Action Plan for the years The National Social Inclusion Strategy was updated with new data in November 2014 (Government Decree 1603/2014. (XI. 4.). Korm. on the approval of the Hungarian National Social Inclusion Strategy II, the Lifelong Learning Policy Framework Strategy, the Public Education Development Strategy, as well as the Midterm Strategy against Early School Leaving). The Government approved the Strategy in the context of administrative proceedings, following prior consultation with the social partners in the Roma Coordination Council and the Inter-ministerial Committee for Social Inclusion and Roma Affairs. The approval of the action plan for the years , based on the above, is in progress, and the social partners are given the possibility to submit programme proposals. 2. Targeted research It is important to emphasize that the effects of the social inclusion measures appear especially in the medium to long term, so special attention should be given to establishing the various measures to improve their efficiency and effectiveness. This is why the selection and substantiation of both the need for reforms and the methods and the target group thereof are based on independent targeted research, relying on statistical data that present the actual state of the society. The monitoring report published by TÁRKI Zrt. in 2014 analyses the social processes in the period of the Hungarian National Social Inclusion Strategy. The Social Report 2014 analyses the condition of the Hungarian society. Published in April 2015, the latest issue of the TÁRKI Household Monitor examines the consumption habits and financial position of the households. In addition, the Government adopted a decision to implement the 2016 micro-census (Government Decree 1069/2015. (II. 25.) Korm. on certain tasks related to the preparation of the survey of the personal, family and housing conditions of the population based on a sample in 2016). The purpose of the "micro census" is to survey, at half-time between the censuses in 2011 and in 2021, the changes over the past five years with the assistance of the Central Statistical Office to ensure that reliable and 2

3 timely data are available for preparing the decisions and measuring their impacts. The sample of the census will include 10 percent of the households and the population, so it will give an overall picture about the size of the population and its composition by the age, sex, family status, nationality, education, employment, housing conditions, as well as the characteristics of the households and the changes since the 2011 census. There are other projects arranged by the Ministry of Human Capacities that are aimed at targeted methodological improvements, in part with the assistance of the World Bank. They include the creation of a poverty map, the development of the dynamic indicator system of social inclusion and its territorial level application, as well as the development of the identification methodology of best practices and its adaptation at the local level. 3. Reforming the system of occupational rehabilitation The measures carried out in the field of occupational rehabilitation between 2012 and 2014 have successfully supported the labour market activity of the people with disabilities, increased the number of those involved in supported employment, and the introduction of the institution of transit employment and the development of the system of labour market services enhanced the conditions for entering the open labour market. On the basis of past practical experience, the review and finetuning of the system, which has been in operation for three years, has become timely, and will start in the near future. 30,375 employees with disabilities are working at more than 330 accredited employers every year. On the basis of transit employment, introduced in 2013, the placement of the workers to the open labour market has commenced, and much bigger numbers are expected to be involved in the coming years. The number of the employees with rehabilitation cards and their employers has been continuously rising since the card was introduced. While in June 2014, 28,981 persons were employed by 7,876 employers, receiving a subsidy of million HUF, in December 2014, 31,403 persons worked for 8,634 companies who received a subsidy of million HUF. 4. Housing and homeless care Provision of access to high quality social, health and other targeted services for homeless persons In 2015, the funding of the care system continues similarly to 2014: 8.2 billion HUF is available for financing the capacities that provide continuously available accommodation and services. Funded through tenders, the key programmes supporting crisis care in winter 2014/2015 facilitate the daily supplementary feeding of 5,000 persons, keeping the day care centres open on the weekend, the development of host institutions and the health care of more than 5,000 people. Housing solutions for homeless persons living on the street Running since 2009, the Social Renewal Operational Programme 5.33 programmes, supporting the social and labour market integration of homeless persons, will be completed in October These programmes are designed to reduce the number of people living on the street, support the social reintegration of the people living on the streets and public spaces by means of employment and housing support as well as social work to promote the retention thereof (individual case management, housing and job search advice, job retention issues etc.). At the moment, there are 17 programmes all over the country that help the social and labour market integration of nearly 400 homeless persons. The source of the entire programme was 2.75 billion HUF, and was announced on several occasions. So far, more than 700 people in the country received support. Improving access to housing In order to effectively manage the already established homelessness and promote the effective social inclusion of homeless persons, it is essential to comprehensively develop and transform the existing institutional system and the scope of services. Building on past experience concerning care, 3

4 the results of the housing and employment programmes, also consulting the professional organisations, the development of the relevant professional concept started in early Transformation of housing benefits/allowances From 1 July 2015, the social policy support, which used to be available to families with two or more children for building or buying a new home, is available to families with one child only, and can also be used for buying a used home or expanding the existing home. 5. family policy measures, including, in particular Support for entering the labour market, encouraging part-time employment In the framework of the Job Protection Action Plan, a reform was developed and introduced to support the participation in the labour market of parents raising a small child. Accordingly, as of 1 January 2015, the employer's tax allowance concerning parents who raise a small child and work part-time is available up to 100,000 HUF gross salary, like in the case of full time employees. It is expected to encourage the dissemination of part-time employment significantly more, which is favourable to the parents raising small children. The measures to promote part-time work also contribute to reducing the gender differences on the labour market, as part-time employment is addressed mainly to women. (In the context of the Job Protection Action Plan, the support provided to the different target groups contributed to the employment of about 900,000 people in total so far.) From 1 January 2015 onwards, parents raising three or more children are entitled to part-time employment for two more years, until the age of 5 of the children, which the employers must ensure. Improving access to child care services The Government aims to promote the harmonization of work and family life, thereby increasing the participation in the labour market of parents raising small children. To this end, we continue and prioritise the development of institutions and services for the placement of children under 3 years of age in the programming period as well. On the basis of the 2014 preliminary data, daytime child care with a capacity of over 43 thousand in the country was available to more than 16% of the children under the age of 3. This percentage has risen from year to year (12% in 2010, 13% in 2011, 15% in 2012 and nearly 16% in 2013). From June 2014 to April 2015, 600 new day-nursery places were/are handed over in the Regional Operational Programme in the context of the New Széchenyi Plan. From 1 January 2015, the Child Protection Act allows the day-nurseries to accept children from outside their service area up to 15% of their capacity indicated in the operating permit (provided that the application for admission of all children from their service area can be fulfilled.) In this context, the legal age for mandatory participation in kindergarten education was reduced from 5 years to 3 years, and the change will enter into force in September Transformation of the social benefit system Entering into force on 1 March 2015, the objective of the transformation of the cash social benefits was to establish a more transparent care system, in which the tasks of the state and the municipal governments concerning the provision of social benefits are sharply separated, and the responsibility of the municipal governments increases in strengthening the social security of the local community and in the unique emergency situations that are considered extraordinary. The transformation of the social benefit system is detailed in Chapter III/4 of the NRP. 4

5 3.2 Recent reforms to achieve adequate and sustainable pensions There were no substantive changes with respect to pensions in the reporting period. On the basis of the preliminary 2014 data, the retirement age remained the same as in the previous year, and is 60.3 years on average, provided, that there was a 0.5 year rise in the case of men and a 0.1 year decrease in the case of women. On the basis of the preliminary 2014 data, the length of the contribution payment period is 38.6 years on average, and is 37.8 years on average in the case of men and 39 years in the case of women (the figure for women is higher due to the availability of the "Women 40" programme 4 ). The essence of the "Women 40" programme is that, from 2012, women may retire regardless of their age on the basis of 40 years of eligibility time, even at an age below the retirement age. It is designed to recognize the role of and the multiple load on women. By the end of January 2015, pension under this legal title was granted to 132,000 women. 4 Women 40 programme: pension available to women based on 40 years of eligibility time. It is intended to recognize the multiple load on and the role of women. The essence is that women may retire regardless of their age on the basis of 40 years of eligibility time, even at an age below the retirement age: on the one hand, this must be established through the extended payment of contributions based on income from work. On the other hand, the regulation continues to include the preference for having children, as the time of using child raising benefits is also counted as eligibility period. The programme is regulated in Act LXXXI of 1997 on social security pensions. 5

6 3.3. Recent reforms in health care The following health policy measures, either planned or implemented, can be accounted for during the reporting period: The "Healthy Hungary " public health-oriented health sector strategy has been completed and approved by the Government. Its strategic objective is to increase the number of healthy life years, and outlines the sectoral management objectives along the enhancement of efficiency and sustainability. The strategy sets the strengthening of primary care as an additional target. The financing system is also transformed: from 1 January 2015, the service providers operating family doctor services with a regional service obligation are now entitled to a utility charge subsidy of 130,000 HUF a month per service. In March 2015, the name of the Institute for Quality and Organizational Development in Healthcare and Medicine changed to State Health Service Centre and, in parallel, its tasks were also modified (it is now operating the Hungarian National Blood Transfusion Service and has an increased role in central purchasing, while its function to organise care was transferred to the National Health Insurance Fund - NHIF). In parallel, the current structure of the healthcare background institutions is also converted and streamlined. In July 2014, a budget of 14 billion HUF was used, inter alia, to pay a part of the overdue accounts payable and public debts of the healthcare service providers and provide one-off compensation for the increased operating costs of patient transport and rescue. In the act on the 2015 budget, 60.0 billion HUF is available for managing the financial problems of the central budgetary organisations, including the healthcare sector, which can be used following the decision of the Government. The transformation of the financing system of specialist outpatient care is in progress in order to ensure the sustainability of the hospitals. The reasonable transformation of the operating framework takes place with the involvement of certain actors of the care system, such as the institutions themselves, as a result of which the objective is to create the professional and structural conditions of long-term balanced operation, along with the consolidation of the debt of the institutions. The waiting list programme continues in Its primary objective is to achieve that there is no patient in Hungary who is queued on the waiting list for more than two years, and that priority highrisk surgical interventions take place within a professionally acceptable time limit. The budget is million HUF, which the NHIF transferred as an advance to the 25 institutions involved in December The source approved for financing surgical operations provides a financial coverage for the care of more than 1500 patients, and an additional source of 5 billion HUF is provided in 2015 to reduce waiting lists. From 1 January 2015, the rules for determining the amount of the cash benefits of health insurance changed in the second stage. The point is that the employers are now required to report to the National Tax and Customs Office, and the NHIF will work based on these data. The income closer in time will be taken into account (thus, the benefit will replace the actually lost income), and the weight of non-regular income will be the same as that of the regular income. Access to medicine supply has improved as a result of the inclusion of new active substances in the social insurance subsidy scheme, in particular in respect of Hepatitis C, cystic fibrosis, haemophilia, cardiovascular diseases, Clostridium difficile and chronic myeloid leukaemia. Earlier, in the year 2014, 6

7 we managed to upkeep the position of equilibrium of the budget in the field of pharmaceutical expenditures as a result of the measures relating to generic price competition. In the field of public health, the impacts of the rules on the protection of non-smokers and the relevant measures are already reflected in the 9.5% decline in the number the smokers, including an 8.5% decline in the number of daily smokers. The implementation of the public health-focused primary care model programme is in progress ( ). It includes the complex screening and lifestyle consulting of 50,000 people, including 10,000 Roma persons. Focusing on the healthy life start and supporting the successful school starting of children aged 0 to 7, including, in particular, those in need of special support, the implementation of the early childhood programme continues and will be completed in the fourth quarter of The operation of the Health Promotion Offices, which were established integrated in the care system to support the preventive capacities of the healthcare system, is ongoing. From September 2014, grade 7 girls in the schools receive vaccination against the human papilloma virus (ratio of applicants for the vaccination: 80%). As regards the children born after 30 June 2014, the vaccination against pneumococcal diseases is integrated into the compulsory vaccination scheme. The large bowel screening programme of women and men in the age range from 50 to 70, based on testing the faecal blood, was extended to other counties, and the programme designed to extend cervical screening by the district nurses was also launched with the output requirements added to the primary training of district nurses. The Ministerial Decree on the nutrition-health standards concerning public catering entered into force on 1 January 2015, and shall be applied from 1 September The recommendations till now are replaced by binding legislation, which is designed to provide healthy catering with the energy and nutrient content necessary for the proper physical, psychic and mental development of the children. The implementation of the comprehensive sectoral electronic system (Electronic Health Service Space) is in progress, which can serve as the basis for developing sectoral, institutional and electronic services and data publication (electronic prescription, ereferral, iregister). The edoki web-based team work was already completed in the period under review, and the system designs of the comprehensive primary care system and the sectoral human resources monitoring system are also expected to be prepared. Due to the results of the Resident Support Programme successfully launched in recent years ( ), the scholarships were advertised again in January The participants of the programme undertake that, after obtaining their special qualification, they will work as a specialist in a publicly financed institution in Hungary for the term the scholarship is paid and that they will not accept gratuities. The developments scheduled during the programming period and implemented in the period under review improved the access to care since they focused mainly on the rural areas that are mostly less-favoured, as well as on more efficient forms of care. Access can also be improved by the National Plan for Rare Diseases and its policy programme, which are the process of revision and approval in accordance with the recently approved healthcare sectoral strategy. 7

8 3.4. Recent reforms to achieve adequate social protection for long-term care needs Funding of the long-term care system and allocation of costs Changes The budget of permanent residential care consists of three items. The licensed service provider receives a subsidy from the state to provide the service, plus the individual pays a service fee on the basis of his/her income and property status and, where this is not sufficient, the maintainer supplements the budget of its institution. The regulation of the service fee was modified and now allows for setting more flexible fees. It also makes the prevalence of the principle of self-care more pronounced in respect of those who can afford based on their income and property status. Supply of services Institutional care Where the primary social service is no longer sufficient, old persons can request institutional care, which provides housing, continuous nursing and care, meals and health care. In order to ensure long term sustainability and the prevalence of self-care, starting from 2015, the maintainers are entitled to determine an entrance contribution in the homes for the elderly. Home nursing/care services The living of elderly people in their homes is assisted by the staff of the home assistance service by carrying out nursing and care tasks. In 2015, the service clarified the mandatory nursing activities to be provided by the home caregivers, and state subsidy is granted solely for those activities. The eligibility limit of the service also changed, and the service may be claimed if one lives with a need for nursing that necessitates the work of skilled and professional social caregivers. Other forms The experience of the current substitution of the nursing and care homes accommodating large numbers of people with disabilities, psychiatric patients and addicts, as well as the period since the introduction of supported living, justified the clarification of the rules for supported living. The Social Act in force since January 2015 clearly defines that maintainers are entitled to reorganise their capacities in the existing nursing and care homes only to a form of supported living, further, that new institutions and new capacities may only be built in apartments or houses. According to the amendment, the nursing and care homes can be expanded up to 50 persons also in the form of home nursing and care, in which case it is not necessary to organise the new capacities in the form of supported living. In order to resolve crises, it is not required to organize the new institution or new accommodation in the form of supported living if the institution taken over is entered into the service provider's register as a new institution. It is not considered to be a new capacity, either, where the persons attended to by the institution taken over are attended to by organising new capacities in the existing institutions of the maintainer. Investment in human capital working in long-term nursing and care Wages The monthly salaries of workers in the social field are set out in the standard pay scale for civil servants on the basis of qualification and the time spent at work. In 2014, the sectoral 8

9 allowance, ranging from 6,000 HUF to 17,200 HUF depending on the grade, was introduced as a mandatory allowance in the social, child welfare and child protection institutions. Improving access to services and choice Information The formation and termination of the institutional relationship and the personal service fee are regulated at the level of an act. The legal remedy scheme previously applied to disputes became standard from 2015: as a rule and in the case of all maintainer types, the decision of the head of the institution may be appealed to the maintainer and, given that an agreement of the parties is involved in all cases, review of the maintainer's decision may be requested from the court within 30 days of the receipt of the decision. The rules on terminating the institutional relationship also changed in Breaching the obligation to pay the service fee by the patient was added to the reasons for terminating the institutional relationship. If the patient has not paid the service fee for a period of six continuous months, and the amount thereof exceeds the amount of two months' personal service fee, his/her institutional relationship may be terminated. This will be added to the agreement on the institutional relationship and, in case of a debt, the patient must be notified of the legal consequences in writing after the lapse of three months. To determine whether the debt is due to changes in the income conditions, an income analysis must be carried out. 9