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START Programme

Country of implementation
Hungary
General short description of the innovation
The measure aims at to make the hiring of young people, school leavers more attractive for employers. The target group of the programme are young people under the age of 25 years or ? in the case of people with higher education ? 30 years who ?nished or temporarily left school and entered their ?rst job. Their employers are eligible for a subsidy during a period of 2 years, as opposed to the 9 months under the previous regulation. The subsidy takes the form of a reduction of contributions: employers have to pay 15% as contributions in the ?rst year and 25% in the second year (normally contributions reach approximately 36% of labour costs).
Target group
Youth
Policy Field
  • general fiscal
Type of Policy
  • public
Duration of the policy
2005
Scope of innovation
  • Scope: temporary (2 years)
  • Spatial coverage: national
General description of (intended) objectives and strategies
The various incentives that promote the employment of school leavers as of January 2005 were replaced by the START Programme valid from October 1, 2005. The target group of the programme are young people under the age of 25 years or ? in the case of people with higher education ? 30 years who ?nished or temporarily left school and entered their ?rst job. Their employers are eligible for a subsidy during a period of 2 years, as opposed to the 9 months under the previous regulation. The subsidy takes the form of a reduction of contributions: employers have to pay 15% as contributions in the ?rst year and 25% in the second year. Normally contributions reach approximately 36% of labour costs (29% social security contributions, 3% employers? contribution and the ?xed-sum health insurance contribution). The reduction of contributions can be used for wages equalling up to 150% of the minimum wage, or 200% in the case of young graduates. This does not mean, however, that the actual wage cannot be higher than this amount: only the amount of the subsidy is capped at these levels. / The subsidy can be taken up on the basis of the so-called START card issued by the tax authority. This card certi?es that its holder is eligible for the discount. All young people under the age of 25 (or 30 in the case of people with higher education) are eligible to receive the card and use it for regular employment or paid internship. The START card can be used for two years from the date of issue with the same or di?erent employers and within the indicated age limits. Thus, the discount is directly linked to the young worker but it can only be used by the employer. The young person might decide not to obtain the card and use the discount. During the employment period employers keep the card. In the event that the young person works (part-time) for more than one employer (for at least 4 hours/day) the subsidy can be used by the employer to whom the card is submitted. There is no obligation to maintain the employment relationship after the termination of the discount. / / / / http://econ.core.hu/file/download/HLM2005/TheHungarianLabourMarket_2006_onefile.pdf, p222-223 /
Nature of the innovation-short-term perspective
Prolonged period for eligible for a subsidy (2 years) in case of employment of school leavers/ young people
Nature of the innovation-long-term perspective
Promote the employment of school leavers
Type of innovation
  • retrenchment or expansion of an existing/earlier policy
New outputs
  • benefit duration (prolonged from 9 months to 2 years)
  • subsidies/tax-credits (reduction of social contribution)
Intended target group
young people under the age of 25 years or ? in the case of people with higher education ? 30 years who ?nished or temporarily left school and entered their ?rst job
Employers-private institutional actors
those employing young people
Actors involved in policy-making/implementation and/or evaluation
  • beneficiaries/users (young and their employers)
  • employers (organised or individual)
Intended output
  • benefit duration (prolonged from 9 months to 2 years)
  • subsidies/tax-credits (reduction of social contribution)
Did the innovation have any outcome related to job quantity?
promote employment of young people
Clarification of outcomes in terms of impacting resilience and labour market inclusion
The measure aims at to make the hiring of young people, school leavers more attractive for employers through a reduction of social contributions.
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