Key facts
- Hungary will launch a means-tested school-start benefit program.
- The annual cost of the program is estimated at 40 billion forints ($128.41 million).
- The program aims to benefit 400,000 children.
- The grant will be 100,000 forints per child, paid in two installments.
- Eligibility targets children from disadvantaged families, including single-parent households and those with chronic illnesses or disabilities.
- The new spending comes as Hungary's budget deficit is projected to be significantly higher than previously estimated.
Hungary is set to introduce a new means-tested school-start benefit program, costing 40 billion forints ($128.41 million) annually, according to Prime Minister Peter Magyar. The initiative aims to provide a 100,000 forint grant, paid in two installments, to approximately 400,000 children from disadvantaged families. This includes children in single-parent households, those with chronic illnesses or severe disabilities, and special needs children.
The announcement comes at a time when Hungary's budget deficit is a significant concern. Magyar's government estimates the 2026 shortfall could exceed 7% of economic output, potentially becoming the European Union's largest. This projection was made even with the anticipated positive impact of a political agreement on releasing suspended EU funding.
Magyar, who defeated right-wing leader Viktor Orban in an April election, stated that no child in Hungary should face disadvantage due to their family's circumstances. His party, Tisza, has pledged to improve the budget through an anti-corruption drive, more transparent public procurement, reduced spending on government "propaganda," and lower debt financing costs.
However, rating agency Morningstar DBRS noted that achieving lasting fiscal consolidation will require structural efforts on both spending and revenue sides that go beyond the measures announced so far. The Tisza party faces the challenge of balancing its campaign promises with the need to lower the fiscal deficit to 3.0% of GDP by 2030.