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Hungary pension reforms and fiscal policy updates

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2026-10-28 11:14 UTC → 2026-10-28 14:45 UTC · added ~~removed~~

Hungary’s state pension system is undergoing significant structural shifts to address demographic aging and poverty. The government has confirmed that the minimum old-age pension will rise from 28,500 forints to 120,000 HUF on January 1, 2027. While the 13th monthly pension and the first installment of a 14th monthly pension will remain, the administration is not proceeding with the previously planned gradual expansion of the 14th pension. Instead, the 14th-month pension is scheduled to increase to 50 percent of the regular monthly benefit in 2027, up from 25 percent in 2026, as part of a phased four-year implementation plan. To support low-income retirees, the government is introducing a ‘Pensioner SZÉP card’ for food, medicine, and leisure, to be rolled out gradually through 2030. In its first year, those with monthly pensions below 250,000 HUF will receive 50,000 HUF, while those between 250,000 and 500,000 HUF will receive 25,000 HUF. Following the approval of the 2027 budget, the government has allocated a 123 billion forint program to improve living conditions for retirees. Pension expert András Farkas noted the plan seeks to reduce deep poverty among seniors by providing tiered supplementary increases for pensions below 146,000 forints. Parallel fiscal reforms include a new wealth tax, a progressive advertising tax, and adjustments to the KATA small business tax system. The 2027 budget also includes personal income tax reductions for minimum wage earners and those earning below 680,000 forints per month. These measures occur alongside a projected budget deficit of 4.9 percent of GDP. In a comprehensive package submitted to Parliament, the government has proposed reducing personal income tax for minimum wage earners to 9 percent, a move expected to increase monthly disposable income by 20,000 forints.

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