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Exemption from health care contribution when hiring disadvantaged people for part time work

Country of implementation
Hungary
General short description of the innovation
Employers were exempted from the payment of the the ?at-rate health contribution in the situation where they hire child care allowance or child raising support recipients for part-time work. The same incentive applies for the hiring of the long-term unemployed over the age of 50.
Target group
Total Population
Policy Field
  • general fiscal
Type of Policy
  • public
Duration of the policy
2004
Scope of innovation
  • Scope: temporary
  • Budgets: n.a.
  • Spatial coverage: national
General description of (intended) objectives and strategies
In the short run, employment can be boosted by the labour market integration of those groups of working age that are not present on the labour market. One of these groups are persons on parental leave. Even though child care allowance and child care support recipients are allowed to take up part-time employment up to an average of 4 hours/day on a yearly basis, most of them do not use this possibility. A main reason is the lack of part-time positions since this type of contract is relatively more costly for the employer than full-time workers. This is primarily the result of the ?at-rate health care contribution which does not take into account working hours. Nevertheless this obstacle was dismantled as of January 1, 2004 when employers were exempted from the payment of the monthly amount of 3,450 HUF of the ?at-rate health contribution in the situation where they hire child care allowance or child raising support recipients for part-time work. The same incentive applies for the hiring of the long-term un-employed over the age of 50. / / http://econ.core.hu/file/download/HLM2005/TheHungarianLabourMarket_2005_onefile.pdf, p136 /
Nature of the innovation-short-term perspective
Promote labour market participation among groups of working age that are not present on the labour market (persons on parental leave and long-term uneployed aged over 50).
Nature of the innovation-long-term perspective
Promote new forms of employment (i.e. part time work) that would ensure flexibility and adaptability to changes on the labour market.
Type of ideal-typical strategy for the innovation
  • others (activation)
Type of innovation
  • new policy, practice or measure
New outputs
  • subsidies/tax-credits (exemption from the payment of the the ?at-rate health contribution)
Intended target group
People on parental leave, long-term unemployed over the age of 50
Working age population
  • employment situation (People on parental leave, long-term unemployed over the age of 50)
Employers-private institutional actors
companies
Actors involved in policy-making/implementation and/or evaluation
  • beneficiaries/users (People on parental leave, long-term unemployed over the age of 50, employers)
Intended output
  • subsidies/tax-credits (exemption from the payment of the the ?at-rate health contribution)
Did the innovation have any outcome related to job quantity?
promote temporary workdecrease costs of labourreintegrate long-term unemployed over 50 and people on parental leave into the labour market through facilitating temporary work
Clarification of outcomes in terms of impacting resilience and labour market inclusion
Employment can be boosted by the labour market integration of those groups of working age that are not present on the labour market, exemption from health care contribution when hiring disadvantaged people (on parental leave, long-term unemployed over the age of 50) for part time work was intended to address this problem. /
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