Hungarian State Treasury

When should the payment of benefits be suspended because of earnings from gainful employment?

Benefits must be suspended for a person who receives

• benefits prior to retirement age,
• a service benefit for armed forces,
• a life annuity for dance artists,
• a transitional annuity for miners

who is employed, private entrepreneur or business partner or engaged in other gainful activities, and whose social security contribution base for the year exceeds 18 times the monthly amount of the statutory minimum wage on the first day of the year (HUF 266,800 in 2024), i.e. HUF 4,802,400 in 2024 (hereinafter: annual limit).

The benefit must be suspended from the first day of the month following the month in which the annual limit is reached until 31 December of the year in question, but not beyond the retirement age. If the social security contribution base exceeds the annual limit amount in December of the year in question, the benefit is not suspended but the December benefit is refunded.

The suspended benefits will be paid again ex officio in January of the following year, without the need for a separate application by the client.

During the period of suspension, the person concerned is considered to be a person receiving a benefit in the same way as before.

A person in receipt of benefits prior to retirement age, a service benefit for armed forces, a life annuity for dance artists or a transitional annuity for miners is obliged to notify the date after the day on which the earnings or income exceeding the annual limit, irrespective of the period to which they actually relate, are paid or transferred to them. The declaration must be made without delay and at the latest within 15 days.

Failure to notify may render the person receiving a benefit liable to repayment of the full amount of the benefit unduly paid.

The client receiving benefits is also obliged to report foreign earnings and income.

Only earnings from which social security contributions have been deducted are included in the annual limit.

Earnings which are not subject to social security contributions and earnings or income from public sector employment during the period of the suspension are not included in the annual limit.

In the case of a service benefit for armed forces, benefits paid to members of the voluntary reserve service in respect of their actual service in the following duties are not included in the calculation of the annual limit:

• contributing to the guarding of the State border during a crisis situation caused by mass immigration under the Asylum Act, implementing measures necessary to manage a conflict situation directly threatening the order of the State border and mass migration, and preventing acts of violence against the order of the State border,
• contributing to the implementation of tasks related to disaster management,

Earnings and income from employment as a contracted border guard or school guard shall not be included in the annual limit.

The Pension Payment Directorate may grant a derogation from the suspension of the payment of the transitional annuity for miners on the basis of a request from the person receiving the pension, on the basis of equitable grounds and in exceptional circumstances. The application may be submitted no later than 30 June of the year following the year in question.

The request for exemption must indicate:

• the natural ID data of the applicant,
• the pension registration number, and
• the special equitable circumstances which justify the exercise of that equitable power.

A decision on the application is taken by the Pension Payment Directorate for the year in question, i.e., the exemption from suspension must be reapplied for each year, provided that the equitable circumstances justifying it exist.

If a person receiving benefits prior to retirement age has a contributory insurance relationship in an EEA State, Switzerland, the United Kingdom or Ukraine, the earnings or income from this relationship must be taken into account when calculating the annual limit.

The other social security agreements do not cover benefits prior to retirement age and therefore the rule on cessation of employment for reasons of gainful activity does not apply to these agreements or to employment in a third country.

Earnings and income earned in foreign currency must be converted into HUF at the mid-rate of the Central Bank of Hungary (Magyar Nemzeti Bank) for the currency in question at the time of payment in order to determine whether the annual limit has been reached.

The Pension Payment Directorate decides on the suspension and possible recovery of benefits received without legal ground on the basis of the notification and the data provided by the State Tax Authority.