The Transformation of the Municipal Social Benefit System in Hungary in the Last Decade

Abstract

The municipalities play a significant role in the field of means-tested social benefits. Additional income benefits are primarily provided by local governments and these autonomous bodies have responsibility for several income replacement allowances. The Hungarian municipalities have strong social powers and duties, but their role is in a permanent transformation. The strongly decentralised system established in the early 1990s has been since centralised. The result is a new model, a mixed system having evolved after 2015. The income replacement benefits have been centralised and the additional income allowances have become more decentralised. In this article, the impacts of this reform are analysed and it may be stated, that the aims of the legislators have only been partly fulfilled. The centralisation of the income replacement allowances has not significantly transformed the former accessibility, a satisfying accessibility was provided by the former, local-based model, as well. The decentralisation of the additional income benefits has widened the gap between the municipalities which have different resources. This gap is relatively significant related to the housing benefits.