Pensioners can receive extra state benefits a total of four times this year - among the reasons for this, in addition to the good performance of the economy, are the trends in inflation and, interestingly, the pandemic.

Two payments have already been received by those concerned, the other two will reach the more than 2.5 million recipients in November. Speaking to the Mediaworks News Center, the deputy minister of finance said in relation to the numbers: no matter how the left pushed the epidemic and the destruction, Hungary could be one of the winners of the recovery period. András Tállai noted: retirees also benefit sufficiently from economic success.

During periods of crisis, the fate of state benefits is usually discussed, and it is usually about who gets how much less. Hungarian pensioners are in a completely different situation: although the last year and a half brought a period of crisis, the elderly can receive additional benefits four times more than before. The schedule, amounts and reasons for the payments were presented by the Deputy Minister of Finance.

13th monthly pension

The first extra payment fell at the beginning of the year, when the state paid the first amount of the restored 13th month pension. The benefit was previously part of the Hungarian pension system, during the previous crisis, but in 2009, the left-liberal government majority at the time decided not to leave pensioners out of the general tightening of the belt, and took away their 13th monthly pension.

- After the outbreak of the coronavirus epidemic, the Fidesz-KDNP government decided to restore the payment in four stages, not least to make it easier for those affected to get through the pandemic period

- said State Secretary András Tállai. The first transfer took place in February this year, when the pensioners received a quarter of the monthly pension, which meant an expenditure of about HUF 87 billion for the budget - and by definition this amount of income for the more than two and a half million beneficiaries. Next year, half of the monthly pension will arrive, and three-quarters of it a year later, and in 2024 and thereafter, those affected can count on the full amount.

Summer pension increase

The next out-of-order benefit was paid by the state in the summer, when inflation was the reason for the extra payment. For this reason, it is worth recalling that according to the law, pensions usually increase by the planned rate of inflation in January. The process of this is that in the previous year, the financial administration estimates how much the money can deteriorate in this country, and this is the amount of the next year's ordinary pension increase. And if inflation were to be higher later, then in November - going back to the beginning of the year - an additional pension increase will compensate for the deficit. This also means that the elderly will receive the increase in one lump sum. Last year, before the pandemic, the cabinet calculated that inflation could be three percent this year, so the seniors' allowances increased by that much at the beginning of the year. However, the pandemic intervened here as well, the scale became larger.

- The government took an unusual measure in the summer: it did not wait for November, but decided on an additional mid-year pension increase - recalled the deputy minister. As a result, pensions were raised by 0.6 percent in June, and the increase due from January was paid to those entitled in one sum.

The benefit amounted to HUF 26 billion in total.

November addition

The series of special amounts will certainly continue in November, you can definitely count on another additional increase, for example, as inflation can be higher than 3.6 percent. Mihály Varga spoke about this in detail in the interview he gave to Origo in July. The Minister of Finance explained at the time that the increase in prices also has international driving forces. - After shutdowns due to the coronavirus, economies are now restarting all over the world, but in many cases the supply cannot keep up with this, and as a result, there is a temporary shortage of certain goods and raw materials. This raises prices, explained the minister, and then stated: pensioners cannot be victims of the global crisis caused by the coronavirus. He also announced that, according to the ministry's calculations, inflation in this country could be 4.2 percent this year. If the government has to use this number as a basis, then

in November, another additional pension increase of 0.6 percent may come, which could once again mean an amount of around HUF 26 billion for pensioners.

Premium, again

The pension premium may also become due in November. This allowance – to put it simply – is granted if economic growth exceeds 3.5 percent, which will certainly happen. Already at the beginning of the summer, the government's calculations predicted an annual expansion of 6.5 percent, which could only be confirmed by the statistics office's announcement the other day, which spoke of an almost 18 percent GDP increase in the second quarter.

Earlier, when planning the 2021 budget, the government set aside more than fifty billion forints for this purpose.

By the way, the elderly have been able to get to know this form of benefit in recent years. - The state first gave a bonus to those receiving pensions or pension-like benefits at the end of 2017, but it did so in 2018 and 2019 as well - reminded the state secretary. Last year, the Hungarian economy shrank due to the coronavirus epidemic, which also took away the pension premium, but this year, on the other hand, there should be little obstacle to the payment.

All of this together means that this year the elderly may receive special allowances four times, the more than two and a half million beneficiaries may receive a total of at least two hundred billion forints.

Source: Hungarian Nation

Cover image: MTI/György Varga