Official: Government spending on family subsidies in 2017 ‘unparalleled’ in Europe

Budapest (MTI) – Hungary’s government will spend 4.7 percent of its gross domestic product (GDP) on family subsidies in 2017, a share unparalleled in Europe, human resources state secretary Bence Rétvári said on Wednesday.

Next year’s budget will raise tax breaks for approximately 350,000 two-child families, Rétvári said. Between 2016 and 2019, the monthly tax benefit for families with two children will double to 40,000 forints (EUR 130), he said. Next year, this benefit will be 30,000 forints.

The reduction of VAT rates on milk, eggs and poultry from 27 percent to 5 percent will leave two-child families with an additional 35,000-40,000 forints a year in disposable income on average, he said.

Rétvári said lower earning families will be helped by a 15 percent rise in the minimum wage for unskilled workers, which he said will leave an additional 130,000 forints with families next year. The 25 percent minimum wage increase for skilled workers will raise families’ annual disposable income by around 260,000 forints, he added.

Military personnel and police officers will also see their wages increase further next year, he said. From September, teachers will also receive a pay rise, which will be followed by an increase in the wages of doctors and nurses in November, the state secretary added.

Next year the government will spend an additional 2 billion forints on providing free hot meals for needy children, he said.

With next year’s increased family benefits, Hungary will become by far one of the most generous OECD countries in terms of spending on family subsidies, Rétvári said.

Source: MTI