’Her livelihood is secured in another way’
The minimum amount of the old-age pension has been unchanged since 2008: HUF 28.500. Authorities use this amount as a basis to calculate social allowances for those of active age. However, the amount of the allowances is even less than the old-age pension. Even writing it down is absurd, not making a living of that. Almost a hundred thousand people of active age are forced into poverty as a consequence of it. On top of that, social authorities often withdraw even this amount from them.
We demonstrate the absurdity of the Hungarian social benefit system in four cases.
How do we understand a social allowance for people of active age?
This is a kind of governmental allowance, which can be claimed by persons who have not yet reached the retirement age, but are unable to work. This can happen when the employment department of the district authority cannot offer any kind of employment possibility (including public work): in this case, they can claim employment ‘substituting’ benefits. Or, if their bad health condition makes work impossible, health impairment and child care support.
This type of care, which is not called aid since people in poverty are called people in need and the labour centers are called employment departments, has extremely strict eligibilty conditions. Some of them are related to income or to wealth, while the rest are basically related to the inability to work and/or to the certification of willingness to work, at the same time. It means that only those are eligible for this support who have absolutely no other possibility to acquire income and can not count on the support of their family either.
The Streetlawyer Association has several clients from whom this not-enough-to-make-a-living-of amount has been withdrawn by the district authority for some of this kind of reasons. We take these cases to court trying to seek remedy for them.
Non-existent treasure
D.L. had become entitled to HUF 26.220 as a benefit for health impairment in 2017 – it is given to those for example who are not entitled to disability benefits because of the absence of social insurance for a certain period – which was raised to 27.075 forint in 2018. It was his total income until August 2019 when a review carried out by the district office stated that he was not entitled to this benefit, since he was the 50% owner of a rural real estate, which was valued to an estimated 1.5 million forint by the local government.
D.L. has been divorced for many years, he lives in a homeless shelter in Budapest. After divorce, he left the countryside house – an undivided joint estate – to his ex-wife and to his - at that time - minor children. Ever since he thought he had nothing, and since he did not attend law school, he wasn’t aware that “entry based on the official record of transfer of rights incurs the transfer of ownership” (Civil Code, 5:168. § (2)Subs.). Therefore since surrender of ownership in favor of the children was not put in writing, the house is still in his property according to the publicly certified register of real estate. Nonetheless, the undivided joint estate makes the utilization of the half of the house practically out of question and selling it is also complicated if not impossible. According to the relevant regulations of the Social Act, those who have utilizable real estate worth more than thirty times of the minimum of old-age pension are not entitled to this benefit. There is however, no statutory provision defining when a property can be considered utilizable, and the authorities neglect this issue as well.
By a strange twist of fate the so-called ’wealth’ of D.L. would not be an obstacle for him to be entitled to the benefit if he moved to the house as the real estate in which the applicant lives does not have to be considered. However, as it was mentioned above the real estate is used by his ex-wife and the kids, while D.L. is trying to survive as a homeless person in Budapest.
Unfortunately, the district authority not only terminated the provision of the social benefit but also ordered D.L. to repay HUF 855.266. His petition of equity to cancel the repayment was dismissed, instead he was allowed to make installment payments, which was not much help considering his lack of income. At the same time, the district office foresees the initiation of judicial enforcement proceedings to collect the debt, which would result in the auction of the house. (It could even be considered as a positive prospect, since there would not be a valid excuse to reject a new request for social benefit anymore. In contrast, the ex-wife and the children would have it worse, since real estates are usually not auctioned for a high price, so most probably their share will be sold on a lower price as well.) Neither the legislator, nor the district office is interested in how the client will make a living until then. The district office however ignored the legally prescribed considerations in its decision-making on the equity request, therefore, we challenged the decision beforr court. The hearing will take place on the 13th of October in the Metropolitan Court.
Because of his mental illness, T.K. is under guardianship and has been homeless for years. In 2018 he was also deprived of his only income, the social benefit for persons of active age. The district authority discovered that he had inherited the 18/144 ratio of a rural residential building in 2001, and they estimated its market value to be more than 1 million forints, so higher than the allowed 855 thousand forints. One option for him is to initiate a civil suit against the other owners living in the building to have the undivided joint estate annulled, and maybe there would be a final decision after several years, but the litigation would probably consume all of the property by then. How he would make a living until then, the legislator does not care about that.
It causes a legal uncertainty that the law does not determine the concept of utilizable asset and so far the courts have not defined it either, as far as we are aware. Anyhow, it is obvious in the case of undivided joint estates – especially when an agreement with the other owners does not seem to be possible in the near future - selling or utilizing the real estate is not an option. Wealth, in such cases, can not contribute to subsistence.
That’s what good friends are for
As a consequence of a review, C.I. has also lost her monthly HUF 22.800 of employment substituting social benefit she was entitled to earlier. She is obliged to repay roughly 250 thousand forints in one amount, because of the expiration of the opinion issued by the employment expert that she did not manage to have extended in time. Missing one deadline practically put her subsistence in danger, she can even starve to death according to the district office. The equity petition requesting the cancellation of repayment was rejected by the district office. The justification provided by the office does not meet the legal requirements either, in fact it can not even be considered a justification at all. We took this case to the court as well.
The L.F. 's social support because of health impairment was annulled by the district office as during review it was discovered that smaller amounts of private donations were transferred to her bank account on an irregular basis. She was in need of help from well-meaning acquaintances since the amount of the social benefit is not enough to live off. These were donations from people who were aware of her hardships and tried to save her from starving to death – yet it can not be considered a real, subsistence funding, or regular income at all. The district office argued that ’her livelihood is secured in another way’ therefore benefit cannot be granted to her. The government office has dismissed the appeal. We have taken the case to the appeals court after this, where we would like to prove that the district office is misinterpreting the Social Law regarding how income should be calculated. The lawsuit will continue in September.
The big picture
The conditions regarding wealth in relation to the active age benefits has been unchanged since the 1st of January 2008. The value of the assets calculated one-by-one might maximum be equivalent with thirty times the value of the old-age pension, and in total it can reach eighty times the value, above those limits there is no entitlement for the social benefit. Only real estate used for habitual living, or a vehicle in case of disability might be an exception. The amount of the old-age pension minimum has also remained unchanged since the first of January 2008 it has been HUF 28.500.
The condition of income (of the social benefit) is also tied to the amount of the minimum old-age pension, it is the 90% of that, HUF 25.650 . As long as one’s so-called consumer unit income is more than this amount, he or she is not entitled to the benefit. (The difference between the amount of the consumer unit and the amount per person is that the prior assigns less than 1 value multipliers to the other members of the household, so its results will be normally higher in cases of multi-member households than the value of per capita.) Calculating incomes according to households also means that no one is entitled to the benefit until his or her family members are in theory able to support their living. This is also the case even if they live separately or their relationship is deteriorated so much that they can not count on each other. Not long ago we had a client seeking support at our legal aid service, who was called on to attach a certification of her ex-husband’s income she had divorced decades ago to her application for social benefit, as it was concluded from the address records that they are registered to the same address. However, our client’s actual place of residence is in a different settlement. So why does she fail to unregister from her previous address? Because in absence of a registered permanent address, an address of current residence cannot be established (as it was called earlier: temporary address) and landlords or flat-owners typically do not approve of having a permanent address registered in their properties.
Conditions of social support in relation to wealth and income levels should be evaluated according to the specific life situations.
It is, however, an even a bigger problem that close to 100 000 people (so many are those who receive some form of benefits for people of active age nowadays in Hungary, yet, as our clients above, many of them do not even receive it despite they would be entitled to) should be provided with amounts enough to secure their subsistence.
The amount of benefits are determined according to the minimum of old-age pension. The employment substituting benefit is – for example – set at 80% of the old-age pension minimum, at 22.800 forint, the health impairment and child care support is at maximum the 95% of the old-age pension minimum in case of a single person who does not have any other income (it comes to HUF 27.075 the most). It is impossible to secure a dignified subsistence from monthly incomes lower than HUF 30.000.
(August 2020)