From 1 July next year, the amount of the infant care allowance will increase from 70 per cent at present to 100 per cent of the pre-tax salary, Katalin Novák announced.

This means that during the six months following the birth of a child, families will be in better financial circumstances than before, given that the child care allowance is only subject to the payment of personal income tax, not to the payment of pension and social security contributions, the Minister of State for Family and Youth Affairs said.

In the wake of an amendment, an allocation of HUF 14.25 billion will be available in next year’s budget, and according to plans, this measure will help around 80,000 families, she added.

The Minister of State stressed that the purpose of the family-friendly governance pursued since 2010 is to remove all obstacles from the decision to have children and to start a family, to ensure that having children does not result in any disadvantage for families, and to create even better financial circumstances for families than they would be in without children.

The raising of the amount of the infant care allowance serves this purpose, Ms. Novák pointed out.

She mentioned as an example that if a woman had a monthly salary of HUF 350,000 before giving birth, this amounted to a net salary of HUF 232,750. However, in the case of the infant care allowance, her net income will amount to HUF 297,500 which is the equivalent of an almost 30 per cent rise, she said.

She added that compared with the earlier amount of the infant care allowance – using the same example – from next July a young mother could receive HUF 90,000 more monthly which represents a 43 per cent increase.

According to the government’s calculations, this will require an annual fiscal allocation of HUF 28.5 billion, Ms. Novák highlighted.

In answer to a question, she said those women will be eligible for the infant care allowance who were insured for minimum 365 days in the two years before giving birth. Adoptive parents are also entitled to this allowance until the child completes the age of six months.

(MTI/Cabinet Office of the Prime Minister)