Raising children in Hungary can represent a substantial financial commitment for an average-income family, even after taking state benefits and tax allowances into account. A new model calculation estimates what extra financial burden — however inappropriately it sounds — having a first child creates over the course of their upbringing and the mother’s working life.
Let’s imagine a fictional family earning the Hungarian average
The calculation assumes a young couple in which both partners earn a monthly gross salary of HUF 754,700, the average wage reported by the Hungarian Central Statistical Office (Központi Statisztikai Hivatal, KSH) for June 2026. Without tax allowances, each would take home roughly HUF 502,000 a month. The model assumes that the mother has her first child at the age of 30 and that subsequent children arrive three years apart.
The children are financially supported until the age of 19. For the first four children, the hypothetical mother eventually returns to work, but after the birth of a fifth child, she is assumed to remain permanently outside the labour market from the child’s third birthday. The calculation is based on 2026 values without discounting future amounts, meaning that money received or lost at different points in the future is simply added together rather than adjusted for its timing.
Ugly question, but what does raising a child cost?
The model divides the financial cost of having children into three main categories. The first is the additional household income required to maintain the family’s standard of living, then the mother’s lost earnings, and finally, the resulting reduction in her future pension. The calculation does not attempt to put a monetary value on the time parents spend caring for children.
According to the same model, each of the second, third and fourth children adds a further HUF 66 million in financial costs. State benefits and tax allowances cover very different proportions of these costs: around 19 per cent for the first child, 97 per cent for the second, 54 per cent for the third and 43 per cent for the fourth.
For a family with three children, the model estimates a total financial burden of around HUF 232 million, of which the state covers approximately HUF 119 million. That leaves roughly HUF 113 million for the family to absorb. The figures are not intended to represent every Hungarian family. Rather, they are based on a hypothetical life course for a couple earning around the national average and are designed to illustrate the economic consequences of having children.
The additional cost of maintaining living standards
To estimate the direct financial burden of children, the model calculates how much additional household income is needed to maintain the family’s previous standard of living. It uses the modified OECD (Organisation for Economic Co-operation and Development) equivalence scale, under which the first adult in a household has a weighting of 1.0, the second adult 0.5, a child under 14 0.3 and an older child 0.5.
Starting from a combined net household income of around HUF 1 million a month, the model estimates that one child increases the family’s income requirement by approximately HUF 201,000 per month during childhood. From the age of 14, this rises to around HUF 335,000 a month. Over 19 years, that produces an estimated additional financial requirement of around HUF 53.8 million per child. The model does not take inflation into account, and assigns the same additional requirement to each subsequent child.
The mothers’ lost earnings
According to Portfolio’s analysis, the second major component is not a direct household expenditure, but an opportunity cost: income the mother would have earned had she not had children. The model assumes that, following childbirth, the mother earns no wages during the first year. In the second year, she earns 25 per cent of the reference income for a woman without children, rising to 50 per cent in the third year. Between the fourth and tenth years, her earnings are assumed to reach 80 per cent of the childless reference income, followed by 90 per cent until retirement.
These percentages are modelling assumptions designed to represent the persistent earnings penalty associated with motherhood found in a Hungarian research. Each subsequent birth is assumed to restart the earnings trajectory. Under these assumptions, the first child results in approximately HUF 37 million in lost earnings. The second, third and fourth children each add a further HUF 11.7 million or so in lost income.
The fifth child produces a substantially different result because the model assumes that the mother leaves employment permanently from the child’s third birthday, at the age of 45. Compared with the working trajectory assumed for a mother of four children, this results in an additional estimated HUF 115.9 million in lost employment income.
The impact on future pensions
Reduced earnings can also translate into lower pension income. The precise effect depends on factors including years of service and how periods spent caring for children are treated for pension purposes. For the purposes of the model, 20 years of retirement and 14 monthly pension payments per year are assumed. The estimated monthly pension for a woman without children is HUF 398,000, compared with HUF 363,000 for a mother of one child. Over the assumed retirement period, that represents a pension disadvantage of approximately HUF 9.9 million.
The second, third and fourth children are assumed to increase this disadvantage only marginally. For the mother of five who permanently leaves employment, the model assumes a monthly pension of HUF 300,000. Compared with the four-child working trajectory, this represents a further estimated HUF 17.4 million in lost pension income. These pension figures are model estimates rather than predictions of what individual mothers will actually receive.
How much does the Hungarian state cover?
Hungary’s family support system combines several forms of assistance, including cash benefits, tax and contribution allowances, and subsidised loans. The model includes CSED and GYED as household income because, from the family’s perspective, these benefits represent additional money available during the child-rearing period. It assumes that the family meets the relevant eligibility requirements for each benefit and tax allowance. Smaller or conditional forms of support are excluded, including certain home-renovation subsidies and benefits unrelated to the number of children. Subsidised loans are considered separately.
The first child would be about one-fifth covered: For the first child, the model estimates the combined value of CSED, GYED, GYES and the one-off maternity benefit at approximately HUF 12.05 million over the relevant period. The model also includes around HUF 2.78 million in family allowance and HUF 4.68 million in family tax allowance. Together, these forms of support amount to approximately HUF 19.5 million. Against a calculated additional financial burden of HUF 100.7 million, the state therefore covers around 19 per cent of the cost associated with the first child.
The second would be the “problem child”: The second child brings a further increase in family allowance and family tax benefits, while the mother also becomes eligible for personal income tax exemption under the assumptions used in the model. Over her entire earnings trajectory, this exemption is estimated to be worth approximately HUF 35.5 million. Including the recurring childcare benefits and other allowances, the additional state support associated with the second child is estimated at HUF 63.4 million. Against an estimated additional financial burden of HUF 65.6 million, that represents approximately 97 per cent.
The third child as the “golden goose”: The family tax allowance increases again with the third child, with its lifetime value rising by approximately HUF 22 million in the model. At the same time, the value of the mother’s income tax exemption falls by around HUF 2.65 million because her earnings are lower as a result of the additional period away from work. Once childcare benefits and the increase in family allowance are included, the additional support is estimated at HUF 35.7 million. That corresponds to around 54 per cent of the HUF 65.6 million additional financial burden.
The coverage falls further with the fourth child: For a fourth child, the per-child level of family allowance and family tax allowance no longer increases. The new child nevertheless generates additional benefits, while the mother’s repeated earnings interruption reduces the value of her income tax exemption. The model estimates net additional state support of approximately HUF 28.5 million, covering around 43 per cent of the HUF 65.6 million additional financial burden. The calculation assumes that both parents can fully use the available family tax allowance through their combined tax position.
What happens with a fifth child?
The fifth child produces a particularly different result because of the model’s assumption that the mother permanently leaves the labour market after the child reaches the age of three. Childcare benefits, family allowance and the family tax allowance continue to provide support, while the model also includes GYET, a benefit for families raising three or more children. However, the mother’s permanent withdrawal from employment substantially reduces the value of income tax exemptions. The model estimates that this reduces the lifetime value of her tax exemption by HUF 26.15 million.
The family also cannot fully use the available family tax allowance in years when it exceeds the tax and contribution liability of the sole working parent. As a result, the level of support improves by only around HUF 1.8 million compared with the four-child scenario in which the mother remains employed. For the five-child family as a whole, the model estimates a total financial burden of approximately HUF 486.9 million. The state covers around HUF 149 million, or roughly 31 per cent, leaving the family with an estimated HUF 337.9 million in financial costs and losses.
Subsidised loans can significantly alter the picture
The calculations above do not include the full effect of Hungary’s subsidised family loans. The Babaváró scheme provides a freely usable loan of up to HUF 11 million. Subject to the relevant conditions, it is interest-free, while the remaining debt can be written off when the third child is born. The CSOK Plusz is a housing loan, with the amount available to a family expecting three children potentially reaching HUF 50 million.
Under the scheme, HUF 10 million of outstanding debt is cancelled after each of the second and third children born following the loan. In the model’s three-child example, a HUF 50 million CSOK Plusz loan would result in total repayments of approximately HUF 44.9 million over 25 years. A market-rate loan of the same size at a constant 6.4 per cent interest rate would result in total repayments of around HUF 100.3 million.
The difference — approximately HUF 55.4 million — represents the combined advantage of the interest subsidy and debt cancellations in this particular calculation. The figure is not added to the earlier family-support totals because the payments occur at different points in time and the comparison simply adds the undiscounted repayments. The take-up of CSOK Plusz also appears limited compared with the number of births, although the two figures are not directly comparable. In 2024, around 11,300 CSOK Plusz contracts were signed, while almost 78,000 children were born in Hungary.
Both subsidised programmes come with conditions linked to family formation. Failure to meet those conditions can result in repayment obligations. For some young people, the child-related obligations attached to these programmes may also make Otthon Start, which does not require a child commitment, an alternative route to consider.
The tax exemption for mothers of two children
The model also raises questions about the economic incentives created by the personal income tax exemption for mothers of two children. From the perspective of having a first child, the measure provides a substantial financial benefit to women who subsequently become eligible for it. After the second child, however, the model points to a more complicated effect. Holding other factors constant, the exemption can increase the financial incentive to remain in employment, because having another child and taking additional time away from work reduces the earnings against which the exemption can be used.
The overall effect on birth incentives therefore depends in part on how strongly the measure affects decisions surrounding the first child compared with subsequent children. The modelling suggests that if policymakers retain the measure, additional forms of support may be needed to ensure that financial incentives do not diminish for families considering a third or subsequent child.
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What the numbers tell us — and what they do not
The figures should not be interpreted as a universal price tag for raising a child in Hungary. The model necessarily relies on numerous assumptions about wages, employment, family size, the timing of births, benefit eligibility, tax liabilities and future pension income. A family earning more than the assumed average would generally face higher income and opportunity costs, while many state benefits are fixed or subject to limits.
As a result, government support would account for a smaller proportion of the overall financial burden. For a lower-income family, support could represent a larger proportion of the cost, provided the household has sufficient taxable income and contributions to make full use of the relevant allowances. The model also does not capture every aspect of parenthood. The time parents spend caring for children, for example, is explicitly excluded.
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The wider demographic question
The financial calculation sits within Hungary’s broader debate over family policy and population trends. A replacement-level fertility rate is generally associated with approximately 2.1 children per woman. From that perspective, every additional birth contributes to the demographic picture, while the transition from no children to one child and decisions about larger families have different financial implications.
The model therefore highlights two distinct challenges for family policy: reducing the financial barriers faced by couples considering their first child, while also addressing the particularly large economic costs associated with raising three, four or more children. The calculations suggest that families with a mother who remains outside the labour market for an extended period can lose not only employment income but also access to income-linked tax benefits.
For policymakers, the question is therefore not simply how much money is spent on family support, but how the design of that support interacts with employment, earnings and the number of children a family has. Ultimately, the model describes one hypothetical family rather than the experience of Hungarian households as a whole. Its main finding is that the financial effect of having a child changes considerably depending on birth order, maternal employment and the extent to which the family can use Hungary’s various benefits and tax allowances.
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