The Guides to Social Policy Law is a collection of publications designed to assist decision makers administering social policy law. The information contained in this publication is intended only as a guide to relevant legislation/policy. The information is accurate as at the date listed at the bottom of the page, but may be subject to change. To discuss individual circumstances please contact Services Australia. Social Security System in Hungary

Hungary's social security system

The Hungarian social security system combines an earnings related public pension with mandatory fully funded defined-contribution scheme. It covers old age and survivors benefits.

The mandatory social insurance pension is operated by the State and the amount of pension based on the number of contributions which are converted to a percentage of the net income of income average wages. For example, 10 years equates to 33%, 20 years is 53% and 40 years is 80%. After 40 years of contributions the rate increases by 2% each year.

The Hungarian system went through major reforms in 1998. Retirement age in 2009 was 62 years and has been gradually increasing from 2010 until it will be 65 years by 2022. Fifteen years of contributions are required for an old age partial pension and 20 years for a full pension. Indexation of the pension is linked to GDP growth (from 2010). There is a minimum pension which is set at around 15% of gross average earnings and 18% of net average monthly earnings for those with at least 20 years of contributions. This is increased as seen necessary by the Government.

Contribution periods can include actual payment periods and non-contributory periods such as time spent in higher education before 1988, military service and certain periods spent in caring for children.

Early retirement is possible for:

  • women aged 59 years (born in 1952 and 1953) and men aged 60 years (born in 1950) if they have 40 years of contributions,
  • 2 years before reaching the relevant retirement age with at least 37 years of service for men born after 31 December 1950 and women born after 31 December 1958,
  • 3 years before reaching the relevant retirement age for women born in 1954-1958, and
  • at age 60 years for men born in 1952 and 1953, at age 60.5 years for men born in 1954 with at least 42 years of contributions.

Survivors' benefits include:

  • widow(er)'s pension,
  • orphan's allowance,
  • parental pension, and
  • accident related survivors' benefits.

Act reference: SS(IntAgree)Act Schedule 29 Republic of Hungary

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