The new Social Security Act, which became effective on the 1st of July 2020, standardized the previous regulations; besides the introduction of a consolidated social security contribution of 18.5%, there is also a significant change in entitlement to health care services.
The base of the entitlement to health care can be an insurance relationship, the payment of the itemized social contribution, but also persons receiving maternity payment, adoption fee, child care payment, sick leave payment due to accident, full-time students and pensioners are entitled.
As mentioned earlier in many of our blog posts, those who are not insured and not entitled to health care due to other reasons must pay the itemized social contribution.
The amount of the contribution has not changed, it is monthly 7710 HUF, daily 257 HUF. The contribution can be paid by another person or institution as well, with the consent of the person subject to the payment. The contribution taken over is not considered as an income of the private person, so this is tax-free.
The current year rate of the health service contribution valid from 2021 will be published by the Hungarian Tax Authority until the 31 October 2020.
There is no change in the rules related to the termination of the insurance relationship: if the individual has had an insurance relationship for at least 45 days then, after the termination the person remains entitled to health care for further 45 days. Until the start of the next employment, the Tax authority automatically calculates the amount of social contribution and informs the private person. From the 1st of July the private person has no reporting obligation, according to the previous regulation the change in the insurance relationship had to be reported on form T1011. A new form has been published replacing the previous one, so reporting can be fulfilled using form 20T1011U from now on, but this is obligatory only in a few cases, for example, if the private person was not classified as a domestic resident, so the employer hasn’t reported the termination and this way the Tax authority can not calculate the amount of the contribution.
Failing to pay the social contribution
If somebody fails to pay the contribution and the amount due exceeds six times of the contribution’s monthly amount (based on the regulations published on the 14th of July, 2020), then the person won’t be entitled to free of charge health services. Although the person’s social security number (TAJ) will become valid again after the payment of the debt, this does not mean that the TAJ number will be valid retrospectively. According to the amendment to the Decree nr. 43/1999. (III.3.) published on 1 July, if the debt exceeds the six times of the monthly contribution, the entitlement to health care cannot be proved retroactively after receiving the treatment.
The condition for invalidating the social security (TAJ) card is that in case of non-payment of the health service contribution, the amount of the arrears must reach six times of the monthly contribution, ie. in case the debt exceeds 46,260 HUF, the person must pay for health services.
If liability is calculated after the 30th of June than for the days preceding the 1st of July, 2020 the old regulations (Social Security Act nr. 1997. LXXX.) are applicable, for the days after the 30th of June the new Law should be applied.
An important change for those liable to pay health insurance contributions is that the contribution obligation due from July must be paid into a new collection account, detailed information is available on the website of the Hungarian Tax Authority:
We continue to report on any changes that come into effect, it is worth following our blog. Read our related previous articles!