The minimum pension of 28,500 forints has long been a key figure in the Hungarian pension system. The government now plans to raise this threshold to 120,000 forints, while adjusting small pensions on a sliding scale, Portfolio reported, citing a Facebook post by Finance Minister András Kármán.
The reform could affect the incomes of approximately 700,000 people, so it may bring about noticeable changes in households in Erzsébetváros as well. The planned budgetary expenditure for the package is 123 billion forints.
## It's not just pensions that would change
The announcement concerns several types of benefits that do not apply exclusively to old-age pensioners. Orphan benefits, disability and rehabilitation benefits, and senior citizen allowances would also increase.
Kármán wrote that some people have had less than 1,000 forints a day to live on. “This could not stay as it was – there can be no debate about that,” the finance minister said.
## Economic arguments for the reform
The minister attributed the change to the failure of the previous economic model. According to him, over the past four years, the Hungarian economy has grown by less than one percent, while the deficit as a percentage of GDP and the national debt have risen more than previously reported.
Kármán also wrote about the public sector’s shortage of resources and personnel. He stated that, rather than taking one-off measures, the cabinet aims to establish systems that are based on predictable resources and are sustainable in the long term.
In addition to the pension adjustment, the government listed back-to-school assistance and reductions in the VAT on firewood and prescription medications among its first measures. According to a statement by the finance minister, extraordinary budgetary funds have been allocated over the past five months to address the summer energy crisis, provide air conditioning for hospitals, and support the child protection crisis fund.
Source: Portfolio
