Hungarian State Treasury

The rules applicable to the pensions of persons who have completed service periods both in Hungary and the United Kingdom after 1 January 2021 are governed by the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community (hereinafter the Withdrawal Agreement) and the Agreement on Trade and Cooperation between the European Union and the European Atomic Energy Community and the United Kingdom of Great Britain and Northern Ireland (hereinafter the Cooperation Agreement).

The Agreement on the Withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community, in force until 1 January 2021, ensures that the social security rights and benefits of the persons covered by it will continue to be determined after the withdrawal by applying the provisions of Regulation (EC) No 883/2004 on the coordination of social security systems and Regulation (EC) No 987/2009 implementing it (hereinafter Coordination Regulations), as applicable in the Member States of the European Union. This right applies, inter alia, in particular to persons who, in the period prior to the date of exit, had already completed service periods and acquired other social security rights under these Coordination Regulations.

The main social security consequence of the UK's exit from the European Union is that, for persons not covered by the personal scope of the Withdrawal Agreement, the provisions of the Cooperation Agreement apply after 31 December 2020 for pension insurance matters that also relate to UK insurance period.

Pensions determined before 1 January 2021 will continue to be paid as they were. This applies to pensioners living in Hungary, the United Kingdom and the European Union. Hungarian benefits paid to a person living in the UK on 31 December 2020 will continue to be paid directly. A Hungarian benefit already paid on 31 December 2020 and determined under the Coordination Regulations can be paid directly to a person living in the UK even if the foreign residence was established after 31 December 2020. The UK's exit from the European Union does not affect the payment of UK pension benefits paid to Hungary on 31 December 2020.

Pensions determined from a date prior to 1 January 2021, taking into account service periods in the United Kingdom and applying the Coordination Regulations, will not be reviewed.

In cases where the starting date for the determination of benefits is after the transitional period, the Coordination Regulations will apply if the applicant was covered by the personal scope of the withdrawal agreement for social security purposes on 31 December 2020.

As a general rule, the Coordination Regulations apply to the following persons:

• Hungarian nationals and other EU citizens and nationals of Iceland, Liechtenstein, Norway and Switzerland who have completed insurance periods in the UK before 1 January 2021;
• UK nationals who have completed insurance periods in Hungary or in another EU Member State, Iceland, Liechtenstein, Norway or Switzerland before 1 January 2021;
• UK nationals who were insured under the legislation of a Member State of the European Union on 31 December 2020;
• Hungarian nationals and other EU citizens who were insured under UK legislation on 31 December 2020;
• surviving dependants who are entitled to benefits for persons listed under a) to d).

The Coordination Regulations will always apply in the above cases, whenever a claim is made. In these cases, therefore, the service period completed in the United Kingdom must be taken into account when assessing the claim.

The United Kingdom's exit from the European Union will not affect survivors' benefits awarded after 31 December 2020 where the pension rights have been awarded to the deceased insured person on their own right under the Coordination Regulations. In this case, the survivor's pension will also be determined in all cases on the basis of the Coordination Regulations.

Any subsequent claim for survivor's benefits shall be assessed under the Coordination Regulations in all other cases where the deceased insured person had completed a service period in the UK before 1 January 2021, irrespective of the date of death.

The following applicants will not be subject to the Coordination Regulations but will be subject to the provisions of the Cooperation Agreement:

• Hungarian nationals and other EU citizens, and nationals of Iceland, Liechtenstein, Norway or Switzerland who have not completed insurance periods in the UK before 1 January 2021 and who are insured under UK legislation after 31 December 2020;
• UK nationals who have not completed insurance periods in Hungary or in another EU Member State, Iceland, Liechtenstein, Norway or Switzerland before 1 January 2021 and who become insured under the legislation of an EU Member State after 31 December 2020;
• survivors who are entitled to benefits for persons under (a) to (b).

The cooperation agreement relating to the calculation of old age pensions and survivors' pensions:

• provides for the possibility of equal consideration of the facts and equal treatment;
• provides for the possibility of taking into account insurance periods completed in another country,
• gives the possibility to pay benefits in the territory of the other State.

If the deceased insured person's service period in the United Kingdom starts after 31 December 2020, the survivor's pension will be determined on the basis of the cooperation agreement.

The method for calculating the pension is the same as the rules for EU pensions below.

The conditions for entitlement to a pension under Hungarian law must be fulfilled under Hungarian law and the conditions for entitlement under UK law must be fulfilled under UK law, so the date of the determination of the Hungarian and UK pensions may be different.

The length of service in both Hungary and the UK is taken into account when assessing the service period, but the amount of the pension is determined only on the basis of the income earned in the country where the service period was completed.

If the Hungarian pension entitlement is also based on Hungarian service period, the Authority will make two calculations. First, the amount of the pension is determined on the basis of Hungarian legislation only, and then it is calculated as a proportion of the Hungarian and total service period, which is known as the proportional calculation.

Of the two calculations, the higher pension is awarded to the applicant.

If Hungarian pension entitlement cannot be established on the basis of Hungarian service period alone, the independent benefit cannot be calculated, so the proportional calculation will always result in the pension amount in this case.

Hungarian benefits awarded to a person living in the United Kingdom may continue to be paid directly into a bank account in the United Kingdom after 31 December 2020, regardless of whether the benefit was awarded solely on the basis of Hungarian legislation, the Coordination Regulations, a social security agreement or the Cooperation Agreement.

For detailed information on the payment of benefits, please consult the information "Payment of benefits to beneficiaries living abroad".

If the insurance relationship started before 1 January 2021 and is still in force on 1 January 2021, the rules of the Coordination Regulations apply, i.e. the obligation to pay contributions applies, as a general rule, in the country where the person pursues the gainful activity as an employee, self-employed person or in a partnership.

In order to determine the existence of insurance, i.e. the obligation to pay contributions, in Hungary, the application must be submitted to the government office acting as the competent health insurance administration body for the place of employment.