Hungary Agreement and foreign pension information 106-04017000

In Hungary, the pension insurance legislation requires the compulsory payment of social security contributions on behalf of employees, usually through deductions from paid employment. The pension insurance covers most workers and the self-employed.

Contributions insure individuals against death and provides for income in the form of a pension once the person reaches retirement age. Separate legislation covers disability, unemployment and health insurance and family and maternity benefits.

The legislation is the responsibility of the Hungarian government but administration and payment of insurance pensions is the responsibility of the central pension insurance institute.

Various local governments manage social assistance for those with low incomes.

The Agreement with Hungary started one 1 October 2012. There are no previous versions.

For Australia:

Department of Social Services (DSS)

For Hungary:

Emberi Erőforrások Minisztériuma - Ministry of Human Resources

For Australia:

Services Australia

Note: the Australian Taxation Office (ATO) is responsible for double coverage provisions.

For Hungary:

Budapest Főváros Kormányhivatala, Nyugdíjbiztosítási Főosztály - Government Office of the Capital City Budapest, Department of Pension Insurance

For Australia:

Centrelink International Services (CIS)

Note: the Australian Taxation Office (ATO) is responsible for double coverage.

For Hungary:

For all claim related tasks:

Budapest Főváros Kormányhivatala, Nyugdíjbiztosítási Főosztály - Government Office of the Capital City Budapest, Department of Pension Insurance

For all current customers:

Magyar Államkincstár, Nyugdíjfolyósító Igazgatóság - Hungarian State Treasury, Pension Payment Directorate

Under the Agreement with Hungary, information held about customers may be exchanged between the liaison agencies to determine entitlement to payments under the Agreement and under either country's domestic legislation (Article 23.1).

Note: Hungary can only provide Hungarian pension details from 1 October 2012. If needed, customers will need to get details of their Hungarian pension before this, directly from the Hungarian pension fund.

For information on bulk data exchange, see International Data Exchange Program and auto indexation of foreign pensions.

The following liaison form is completed by Centrelink International Services (CIS) and sent to Hungary.

• AUS187HU - Australia/Hungary Agreement on Social Security

For help with creating and completing the liaison form, see Agreement liaisons, NZ CICs and exchange of information.

The following liaison forms are completed by Hungary and are sent to Centrelink International Services (CIS)

ADATKÖZLŐ NYOMTATVÁNY - COMMUNICATING FORM (HU/AUS001)

This liaison form is used in all communication from Hungary.

• Section 1 - Institution
• Section 2/3 - Information concerning the insured person: provides personal details
• Section 4 - Claimant:
• SUR details only: provides personal details about the survivor
• Section 5 - Part A: details information requested by Hungary
• Section 7 - Part B: details information provided by Hungary, including Hungarian pension details
• Section 10 - Hungarian institution: certification by the Hungarian competent institution

IGAZOLÁS A MAGYARORSZÁGON SZERZETT BESZÁMÍTHATÓ IDŐSZAKOKRÓL - CERTIFICATE OF CREDITABLE PERIODS IN HUNGARY (HU/AUS205)

This liaison form provides information on Hungarian periods of coverage, generally for Australian claims.

• Section 1 - Institution
• Section 2/3 - Information concerning the insured person: provides personal details
• Section 4 - Claimant: SUR claims only: provides personal details about the survivor
• Section 5 - Hungarian creditable periods
• Section 7 - Hungarian institution: certification by the Hungarian competent institution

Invalidity/Disability pensions are not covered by the Agreement. However, the Agreement allows the exchange of existing medical information and to undertake medical examinations on request (Article 23.2 and 23.3).

Generally, the liaison agency will contact Services Australia and request this be done. There is no provision for reimbursement of costs to either country.

The customer should contact Services Australia if they receive a direct request from the liaison agency to undertake a medical examination. The customer must be advised to undertake Services Australia’s foreign pension medical assessment process. Where the customer has already undertaken a medical examination based on a direct request from the Agreement partner without consulting Services Australia, the customer should contact the liaison agency to discuss any possible reimbursement options.

If a customer is claiming reimbursement of costs based on undertaking a medical examination requested by Services Australia for foreign pension purpose, consider all evidence provided. For example, if incorrect advice was provided to the customer by Services Australia that caused them to seek an independent medical examination which caused the customer to be out of pocket.

Refer to Customer compensation and Act of Grace.

See Agreement Country Document Catalogue (ACDC) for samples of forms, foreign documents and translations.

The Agreement with Hungary includes double coverage provisions. Certificates of coverage are used to confirm exceptions.

Any enquiries about double coverage or certificates of coverage should be directed to the Australian Taxation Office (ATO) website.

Any queries about taxation of pensions or the requirement to lodge a tax return should be directed to:

• In the other country - the tax authority in the other country
• In Australia - the Australian Taxation Office (ATO) website

For general information on taxation, including issuing Australian payment summaries.

Australia has a double tax agreement with Hungary, which avoids the need for the customer to pay tax in both countries.

A person who is 'resident' in one country (according to the definition in the tax agreement) generally only pays tax on pensions in that country.

Tax deductions from income by one country may be allowed as a credit against tax payable in the other country.

Tax deduction

Hungarian pensions do not usually have tax deductions.

The gross rate of Hungarian pension, before any deduction, is maintained.

Hungarian tax year

Hungary generally uses the calendar year (1 January - 31 December) as the tax year.

Australia does not have a Reciprocal Health Care Agreement (RHCA) with Hungary.

See general information on health insurance and Medicare coverage.

Any queries about:

• Health insurance coverage in the other country - tell the customer to contact the health insurance authority in the other country
• Medicare coverage – direct them to Medicare

Pensioners in Hungary usually have a health insurance deduction (Egészségbiztosítás) taken out of their Hungarian pension.

The gross rate of Hungarian pension, before any deduction, is maintained.

The official language of Hungary is Hungarian.

See Hungarian naming conventions and pronunciations.

Telephone country code is +36.

Street address

Title FirstName Surname [Addressee]

BUDAPEST [Locality name]

VIRÁG TÉR 3. IV. 61 [Street name and type + house no.+ floor + apartment. no.]

1037 [Postcode]

HUNGARY

Post Office Box address

Title FirstName Surname [Addressee]

DABAS [Locality name]

PF. 83 [P.F + P.O. Box no.]

2380 [Postcode]

HUNGARY

Hungary has recognised registered partnerships since 1 July 2009, offering same-sex couples nearly all the rights and benefits of marriage. Unregistered cohabitation for same-sex couples was recognised and placed on equal footing with the unregistered cohabitation of different-sex couples in 1996. However, same-sex marriage is prohibited by the 2011 Constitution of Hungary, which took effect in January 2012.

For Australia, the Agreement with Hungary (Article 2.1) covers:

• Age Pension

Claims for Australian payments under International Agreements use the same methods and processes as domestic claims.

Forms to claim an Australian payment in Hungary can be obtained by:

• downloading the relevant form from the Services Australia website. See Resources
• contacting Centrelink International Services (CIS)
• contacting the Hungarian authorities

Australian forms needed

The customer is to complete and provide the following:

All claims:

• AUS140HU - Australian Pension Claim - Social Security Agreement between Australia and Hungary
• Mod(iA)HU - Income and Assets - Hungary

Forms can be lodged at any Hungarian social security office.

Under Section 7 of the Administrative Arrangements, the Hungarian liaison agency will

• accept all forms/documents and date stamp the AUS140 form
• verify the customer’s identity and personal details, and
• send the form(s) and any supporting documentation to Services Australia with a liaison form specifying periods of coverage in Hungary and information regarding Hungarian pensions

See Exchange of information and liaison forms.

If a person is not an Australian resident and in Australia on the date the claim is made, they may use the Agreement to meet the residence rules for claims if, on that date, they are:

• an Australian resident or a resident of Hungary (Article 12(a)), and
• physically present in Australia or Hungary (Article 12(b))

Claims under the Hungarian Agreement

Claims for Australian payments under the Hungarian Agreement may not be lodged in other Australian Agreement countries.

See the Claim lodgement matrix.

Accepting other Agreement claims

Hungary will accept claims for Australian benefits under other Australian social security agreements.

Claim lodgement consideration

The customer must also satisfy any other rules under the other Agreement and social security law provisions.

The normal rules for working out the date a claim is 'made' and the start day apply to claims under the Agreement with Hungary. However, the Agreement also allows:

• the date of lodgement of a claim for an Australian payment in Hungary to be used as the date of lodgement in Australia (Article 20.2), and
• the date of lodgement of a claim for Hungarian Old age pension to be used as the date of lodgement of a claim for Australian Age pension (Article 20.3) if:
• the person declares periods of residence in Australia at the time of claiming the Hungarian payment
• the Australian Component Institution receives the claim for the corresponding Australian pension within 12 months of the date of lodgement of the Hungarian claim

For coding help, see:

• Claims for Australian payments under International Agreements) and
• Start Day (CLK)

The Agreement allows:

• totalisation of periods of qualifying Australian residence and creditable periods in Hungary to meet any minimum periods to qualify for an Australian pension, for example, 10 years for Age Pension (Article 13.1)
• the total of any non-continuous Hungarian creditable periods to be considered to be continuous to meet any continuous residence requirement to claim an Australian pension (Article 13.2)

Note:

• Overlapping Australian residence and Hungarian periods of coverage are only counted once (Article 13.3)
• Adjoining periods of Australian qualifying residence and Hungarian creditable periods, with a break of up to 3 months in between, can also be considered to be continuous (Policy)

See Resources in International Social Security Agreements for examples of totalisation.

Hungarian periods of coverage:

• means a creditable period, for instance, a period during which contributions were paid, or any equivalent period, as defined in the Hungarian legislation
• where equivalent periods may include deemed periods, such as for child rearing or military service
• where both actual and deemed periods may be used when totalising for Australian qualification purposes, as long as they are certified and don’t overlap
• is always stated in the Hungarian pension grant letter
• must be certified by the Hungarian Competent Institution

To be able to use the totalisation provisions, a person who is not an Australian resident at the date of lodgement must have at least 12 months Australian Working Life Residence (WLR) in Australia of which 6 months must be continuous (Article 13.4(a)).

Note: unlike WLR for rate, this period cannot be rounded.

No minimum WLR is needed if the person is an Australian resident at the date of lodgement (Article 13.4(b)).

Customers residing in Hungary do not meet the ongoing residence requirement for DSP.

For customers outside Australia, the Agreement with Hungary refers to the overall rate calculation contained in section 12(1) the Social Security (International Agreements) Act 1999 but specifically excludes additional child amounts (Article 14.1).

This means customers paid under the Agreement have:

• a proportional rate paid according to their Australian Working Life Residence (WLR)
• the Rate Limiter/Limited Rate applied
• additional child amounts (s.14A SS(IA) 1999) included if eligible

The Hungarian Agreement does not include the proportionalisation of any Hungarian pension in the income test (Randisi concession).

Note: in some circumstances, their partner's WLR may be used. See Working Life Residence (WLR).

Non-proportional rate extension

Customers paid under the Agreement and temporarily outside Australia, cannot have their non-proportional portability rate extended if they are unable to return to Australia.

Returns to Australia

The proportional rate continues to apply for the first 26 weeks of a temporary return to Australia (Article 14.2).

• For returns to Australia before 9 June 2018, manually code Temporary Return to Aust Ind: on the Residence Savings (RSS) screen.

Customers in Australia under the Agreement are paid a direct deduction rate (Article 14.3).

The Agreement does not include a comparison rate in Australia.

Departures from Australia:

The inside Australia rate continues to be paid for the first 26 weeks of a temporary departure from Australia (Article 14.4).

Under the Agreement, provided the customer remains qualified, Australian Age pension is payable indefinitely in any country provided the person remains a resident of Australia or Hungary (Article 5.1).

Third country portability under the Agreement

There is no portability for a permanent departure to a third country for a customer paid under the Agreement.

If necessary, a customer who receives an autonomous payment that stops being payable due to portability reasons can transfer to the Agreement to continue payment if:

• the payment is covered by the Agreement, and
• the customer is able to meet the lodgement provisions of the Agreement

If transferred to the Agreement, all Agreement rules apply to the customer, including portability and rate of payment.

See Transfers to international social security agreements.

A person who has sufficient Australian qualifying residence (or an exemption) can transfer from the Agreement to autonomous only if they are an Australian resident and in Australia.

On return to Australia, system processing will automatically transfer from the Agreement to autonomous if the person is an Australian resident who has only used the Agreement to extend their portability while outside Australia,

Former resident provisions may affect customers who transfer to autonomous if they leave Australia again within 2 years of becoming an Australian resident.

Australian payments may be issued to customers outside of Australia. If the customer intends to be outside of Australia:

• long-term (12 months or longer), their Australian payment may be issued to an overseas bank account. See Overseas Bank Account Details (OBAD) for payment requirements by country
• for less than 12 months, payment will generally continue to their normal Australian bank account every 2 weeks

See Delivery of payments to Centrelink customers outside Australia.

For Hungary, the Agreement covers the pension and disability insurance legislation.

Main payments

• Öregségi nyugdíj - Old Age Pension (AGE)
• Hozzátartozói nyugellátás - Survivors Pension (SUR)
• Özvegyi - (Widow/er)
• Árvaellátás - (Orphan)
• Szülői - (Parent)

The following known payments are paid by the Hungarian authorities but are not covered under the Agreement:

• Rokkantsági nyugdíji (Invalidity pension)

For help with:

• Assessment of Hungarian pensions, see Assessment
• Coding of Hungarian pensions, see Eligibility and Coding

The requirement to claim Hungarian pensions applies to Hungarian AGE.

Note:

• Customers may voluntarily claim SUR for themselves or other family members using the SUR claim pack
• A customer may voluntarily claim INV. As this is not in scope of the agreement it is a RQI request to Hungary and we do not help with medicals

See Foreign pension claims.

Eligibility and coding of foreign pensions tab contains detailed information on Hungarian payments that are subject to CFP legislation.

Claim packs are available for AGE and SUR.

Claim packs are issued through the Foreign Pension System (FPS). See Assisting customers to claim a foreign pension.

Specific requirements for Hungarian claims

The customer is to complete and provide the following:

AGE only:

• CLAIM FORM FOR THE HUNGARIAN OLD-AGE PENSION -IGÉNYBEJELENTŐ LAP MAGYARORSZÁGI ÖREGSÉGI NYUGELLÁTÁSHOZ (AUS/HU202)
• Original Hungarian workbook (Munkakönyv) or other evidence. Note: a certified copy must be given to the customer

SUR only:

• CLAIM FORM FOR THE HUNGARIAN SURVIVOR'S PENSION - IGÉNYBEJELENTŐ LAP MAGYARORSZÁGI HOZZÁTARTOZÓI NYUGELLÁTÁSHOZ (AUS/HU203)
• Death certificate

Requests for additional information

If information provided with the claim for Hungarian pension is incomplete, Hungary will send requests for information in Hungarian direct to customers.

Receipt of foreign pension claim by Services Australia:

Under the Administrative Arrangements, Hungarian forms can be lodged in Australia at any service centre. See Processing a foreign pension claim.

• All foreign pension claims and supporting documents must be scanned, and
• The original foreign claim form, the original Hungarian workbook and copies of supporting documents must be sent in paper form to Centrelink International Services (CIS). See Processing a foreign pension claim

Centrelink International Services (CIS) only:

CIS will complete the following or arrange for the following to be completed as necessary and attach the documents to the foreign pension claim to send to the agreement country. See Agreement Liaison Detail (ALD) for method of transmission.

CIS staff are required to sign the relevant section in the claim form.

All claims:

• AUS187HU - Australia/Hungary Agreement on Social

For help with creating and completing the liaison form. See Agreement liaisons, NZ CICs and exchange of information.

Hungary requires Australian historical periods (RSHAR). Change summary line of AWLR DOC to read RSAHR.

CIS staff are required to sign the relevant section of the claim form.

Enquiries about claims for Hungarian payments in Hungary or a third country should be directed to the Hungarian social security authorities.

Hungarian payments may be paid by direct deposit in Australia.

Any queries about the non-payment of Hungarian pension should be directed to the Hungarian pension authorities.

Agreement pensions are paid as 12 regular monthly payments and a bonus 13th payment in January. Multiply the monthly pension amount by 13. Code as Freq: 'ANN'

Other benefits or private pensions are normally paid monthly or annually.

Hungarian pensions must be recorded in the source currency - Hungarian Forint (HUF). Official statements provide the foreign currency amounts.

Amounts recorded in source currency on the Foreign Pensions Details (FPD) screen must not be changed to the Australian dollar amount.

Note: payments into Australia are made in Australian dollars.

Hungarian payments are generally increased for Consumer Price Index (CPI), or cost of living) in January each year.

For information on bulk exchanges and auto adjusted CPI increases, see International Data Exchange Program and auto-indexation of foreign pensions.

• directly deducted (Article 14.3) and ignored in the income test (Section 8(8)(zc) Social Security Act 1991) for customers paid under the Hungarian Agreement who are in Australia
• ordinary income (not proportionalised) for customers paid:
• under the Hungarian Agreement who are outside Australia
• autonomously inside or outside Australia
• under an agreement other than Hungary or New Zealand, who are inside or outside Australia

See Rate Calculation for when a direct deduction or proportional rate is applied.

Note:

• Widow/er pensions are usually paid for at least one year with continuation dependent on meeting certain criteria for example, dependent children or disability
• Each member of a couple is deemed to receive half of the total amount received by the couple (Article 14.5)

• Rokkantsági nyugdíji - Invalidity pension (INV)

There are no exempt payments under the Agreement with Hungary.

The Agreement does not include embargo provisions.

Arrears debts for customers and their partners are raised under s1228A Social Security Act 1991 and recovered via normal methods under the Act. See Comparable foreign payment lump sum arrears.

When an arrears period is not provided, the arrears period end date may be assumed to be the end of the month before the date on the official notice or liaison form.

A contravention debt may also occur if the customer does not advise of the grant of their Hungarian payment within their notification period. See Foreign Pension coding.

Life certificates (ADATEGYEZTETÉS (FK-59)) are issued to Hungarian pensioners. This form is used to verify customer’s personal information each year in February.

Hungarian Life Certificates can be certified by an officer of Services Australia.

For information about helping customers with life certificates, see Assisting customers to maintain an existing foreign pension.

Customers in Australia are sent notices at grant and will receive an annual statement each year.