“The Government’s goal is for it to be increasingly easy year-by-year to start a family in Hungary”, the Ministry of Human Capacities State Secretary for Family and Youth Affairs Katalin Novák declared on Kossuth Radio’s “Sunday Papers” show.

According to Ms. Novák, it is with relation to this that the Government has further simplified the terms for applying for the “baby shower” subsidy being introduced from 1 July. As she explained, the Government would like this form of support to be accessible to the broadest circle possible and with as few hindrances as possible.

Accordingly, the regulation has been expanded to also include babies born in June, she explained. So far, the new legislation has stated that funding is only valid with respect to babies born following the signing of the funding agreement. “The logic will remain the same in future, but with respect to babies born in June it is not realistic to expect parents to already have a concluded agreement”, she said, justifying the move.

Married couples where the wife is under forty and at least one of the parents has been in employment for at least three years, or has been in higher education for at least three years, are eligible to apply for the baby shower subsidy. “They will then be able to request the deferral or waiving of part or all of the loan when the babies being arriving nicely one after the other”, Ms. Novák said.

As she explained, the Ministry also consulted the Hungarian National Bank prior to introducing the subsidy, and the central bank issued an official opinion. “Part of this is the ‘debt brake’ that was introduced years ago precisely at the recommendation of the central bank, in view of the fact that we all know to what extent the country found itself in debt as a result of the measures an damaging politics of the Gyurcsány government and the Medgyessy-Gyurcsány government. Not only was the country and its local governments in debt, but so was the population, and the majority of Hungarian people were burdened by having to repay forex loans” she pointed out.

The State Secretary said the Government wouldn’t like a similar situation to occur again and would like to avoid a similar debt trap in future. This is why loans must now include a total credit rate indicator and this is also why the debt brake exists. The fundamental principle is that the loan repayment instalment cannot exceed a certain percentage of a person’s salary; typically, the amount that a family has to put aside month after month to repay their loan cannot exceed half of their monthly salary,

“If one member of a married couple earns the minimum wage, they will also be eligible to apply for the 10-million-forint (EUR 31,000) baby shower subsidy. In such a case, the maximum monthly instalment payable is 50 thousand forints, the loan must be repaid in instalments of this size, but as children are born the repayment of the loan is suspended and part or all of the remaining debt is waived”, she explained.

The Hungarian National Bank also stated that 75 percent of the baby shower subsidy may be used as a contribution towards another loan or any loan. If the young couple need a loan, they may regard the baby shower subsidy as their own contribution and may also use 75 percent of this to redeem a loan, meaning that in the case of 10 million forints they can use 7.5 million forints as a contribution towards another, separate loan.

With relation to the fact that some people may have found themselves in arrears with relation to another loan through no fault of their own, Ms. Novák said people who are still on the Central Credit Information System’s negative list (meaning they have already repaid their debt) will also be eligible to apply for the baby shower funding.

On the subject of the other new opportunities being introduced, she said the subsided-interest loan available within the framework of the Home Creation Scheme is being expanded to enable it to also be applied for with relation to used properties, in addition to which the car purchasing subsidy for large families is also being introduced, which is a subsidy that is specifically available for families that already have children. In addition, families that already have small children will be able to enjoy the results of the government’s nursery school development projects and the expanded nursery services.

She highlighted the childcare fee (GYED) for grandparents and the exemption from personal income tax for women with four or more children, both of which will be introduced from 1 January next year. With relation to the latter, the opportunity will be specifically available to mothers or grandmothers who have already had four children and possibly already raised them, and who are not eligible for other family tax benefits in view of the fact that their children are already adults. “From 1 January they will not have to pay a single cent in personal income tax”, she emphasised.