Home > Uncategorized > If you want a happy retirement, start producing babies

If you want a happy retirement, start producing babies

May 21, 2012

Common wisdom holds that one of the reasons for the relative popularity of the late Kádár regime was the communists leaders’ decision to leave people’s private lives alone. They didn’t particularly care, as long as it was not political, what people did at home. They let them work on their weekend houses while they tried to make sure that living standards grew steadily if modestly.

The Orbán regime, although in many respects following in the footsteps of  the government in power prior to 1990, seems to have overlooked this key element of the Kádár experience. They want to reshape the very thinking of Hungarians to embrace the value system that Fidesz and the Christian Democrats tout. Hungarian right-wing politicians value the love of country above all. Citizens should place the interest of the community over and above their individual welfare. They should marry, preferably in a church ceremony.  And they should have large families. The leading lights of Fidesz are role models in this regard. Four or five children seem to be the norm.

I suspect that the decision to produce large families has ideological roots and is not based solely on demographic considerations.  I’m pretty sure that the fear so often voiced that Hungarians will one day disappear from the face of the earth is real as far as they are concerned. The high birthrate of the Roma population is also an added incentive. To their way of thinking the birthrate of Gypsies should be reduced somehow while “true” Hungarians, especially members of the middle class, should have many children. In this way, the Hungarian nation’s future will not only be assured but will also be more glorious: the “smarter” people will produce a smarter population.

I know all this sounds pretty crass, but I’m almost certain that such thoughts are not  far from many Fidesz politicians’ thinking. Government policy reinforces this ideology. It’s enough here to think of the very large tax benefits for higher income people with many children.

Now it seems that a new scheme is under consideration to promote the Hungarian birthrate. The instrument is the pension system. The size of an individual’s pension would depend on the number of children he or she had. The number of children in the calculation could be so drastic that two people holding identical jobs with identical salaries could end up with grossly different monthly stipends. Someone without children could receive half of what another person in the same category but who was fruitful and multiplied would get.

This brilliant idea comes from József and Katalin Botos, university professors, who maintain that the members of the current generation of child-bearing age with children should receive higher pensions because they contributed to producing offspring on whose contributions the current structure of old-age pension rests. There are some officials in the Ministry of National Economy who would go so far as to deprive childless people of pensions altogether.

The system submitted by Botos & Botos is based on a scale that would reward people on the basis of the size of the family. They made some calculations based on the 2010 economic data that illustrated the results of their system.

In 2010 the average gross income in Hungary was 213,000 forints and the net 139,000. After forty years of employment a person would receive 14.4 points, but only if he or she had two children. In the case of three children there would be an additional 2.2 points, while after four children the parents would each receive 3.5 extra points.

On the other hand, if there is only one child in the family husband and wife would each receive 3.7 points fewer and if they they didn’t manage to produce a child at all each would be docked 5.5 points. What would that mean in forints? Calculated on the basis of the average pension of 114,000 (2010), a childless pensioner would receive a 70,000 monthly pension while someone with four children would get 142,00 forints.

Of course, this is nonsense but I wouldn’t count on the Orbán government to discard the idea. It seems to fit in nicely with the general attitude of this government concerning family and procreation. The only good thing is that Botos & Botos suggest that their system should be introduced for those who will draw their first checks as pensioners after 2032. So, it would be applicable only to those who are now forty-five years old or younger. I wish those 44-year-old women the best of luck in their efforts to receive a few more forints as pensioners in twenty years.

There is one more good thing about this date. By that time, I hope, Orbán and his college friends will be only a bad dream.

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  1. GW
    May 21, 2012 at 7:24 pm | #1

    What about married couples who are infertile? The bias in such a plan against people who are unable for medical reasons to have children (or even more than one or two children due to medical reasons) is obvious and bound to end up in European court. Also,it would be highly inconsistent if the Catholic Church were to support such a plan as Church doctrine is clearly in favor of marriage once and no artificial fertility treatments. And should, however, an exception be made in the proposed law for medically diagnosed infertility, this would raise significant privacy issues. Does anyone really think it’s the state’s business to know such intimate details of one’s life? This is insanity.

  2. May 21, 2012 at 8:32 pm | #2

    Say what … am I understanding this right? If you an over 40 female with no children the you screwed? Ouch, this did come out right … I mean you pretty much have no chance to a decent pension? Were these guys listening in the high school biology classes?

    Thank you so much professor Balogh for the work moving over the blog to WP!

  3. GDF
    May 21, 2012 at 10:59 pm | #3

    Another similarity with the Ceausescu regime. They taxed those who had no children. Also, they checked periodically every woman of childbearing age for pregnancy and then kept track of those who were pregnant, to eliminate any chance that someone could have an abortion (I am almost afraid to write this, someone in FIDESZ may read it and propose to introduce it).

  4. May 21, 2012 at 10:59 pm | #4

    Actually under the Kadar regime you had a better chance to get a government rental apartment if you took the promise to have one, two, three children, as you got ahead of the line….

    Now, as far as this other bright idea from the never ending supply of Fidesz geniuses… Does the child need to survive in order for the parents to receive the extra money? I mean how about if you have two kids but one died at birth? Also, since Fidesz considers life starting at conception, what happens if some mother looses four, five pregnancies. I personally know several women who have first, second or third trimester losses. What would Fidesz consider as a “living child”? How about if your child dies from some tragical circumstances at school age, before they can contribute to old-age pension structure at the time?

  5. May 21, 2012 at 11:02 pm | #5

    Oh, one more question.. how about kids who were fathered by an other man, not the husband. Who will get the points?

  6. GDF
    May 21, 2012 at 11:02 pm | #6

    Could someone explain what all those characters mean when one clicks on the Quote button (I am using Firefox).

    Thanks.

  7. May 21, 2012 at 11:06 pm | #7

    I see where you’re going. All you have to do is adopt a dozen kids and you’ll live like a king after retiring.

  8. May 21, 2012 at 11:11 pm | #8

    GDF :
    Could someone explain what all those characters mean when one clicks on the Quote button (I am using Firefox).
    Thanks.

    It is not a Forefox thing. If you wish to quote the post you are replying to the Quote puts it in HTML format. Do not worry about it. Use it of you wish the text to be quoted, but start your “reply” below the “those characters”

    Maybe Eva can turn this function off as not to confuse the html novice posters.

  9. GW
    May 22, 2012 at 2:29 am | #9

    Some1 asked: ” Does the child need to survive in order for the parents to receive the extra money?”

    A very good question. Only 30 to 40 percent of pregnancies are carried beyond the first trimester, the majority are naturally miscarried as spontaneous abortions very early on and in most case, these are lost before the mother is aware of the pregnancies, (Most conceived twins are actually born as singletons.) Given the Catholic doctrine of life beginning at conception, one wonders how the government would plan to count these.

  10. GW
    May 22, 2012 at 2:33 am | #10

    Perhaps more critically, this absurd measure disadvantages infertile couples. I doubt it would pass muster with European courts and it would be absurd if the Catholic Church supported it, given the doctrines of marriage only once and no artificial fertility treatments.

  11. CharlieH
    May 22, 2012 at 3:15 am | #11

    London Calling!

    Another barmy idea! (That is why it will probably gain traction with the Fidesz crowd.)

    Another idea that Orban is pioneering to save Europe? He’s such a martyr!

    An aspect which has not been highlighted is the Roman Catholicism facet of this social engineering.
    God will be pleased; as will the Pope and Priestly congregations. Orbans saintly profile will earn him many brownie points in his religious bubble.

    In England – unusually – his proposed plan to give women with children more votes was widely reported and ridiculed. (Yes it reached England!)
    I remember on Radio 4 James Naughtie mocked the policy by suggesting that it was ludicrous – whatever next? Maybe they should award votes according to the number of dogs people had.

    And another thing. How the government (or their advisers) expects anyone to live on 70,000 Forints a month – just by suggesting it – shows how callous this regime is.
    (I know it’s not a true guide but 70K to an Englishman works out at about £200 a month – true poverty here.)

    So you can (must) contribute all your working life to a pension that you will have no right to collect – depending on your desire/ability/luck to procreate. Of course it will only be available to the marrieds – children born to ‘unhitched’ parents are already denied welfare.

    This tinkering is a corollary of removing the right to a decent pension – based on contributions – from the constitution.

    Next the rationing of health care.

    The ‘laughs’ we get here in England about Hungary and its ‘experiments’ – and Orban’s selfless sacrifices to save Europe – become sadder – and more preposterous by the week.

    So many breaches of basic democratic values and principles – the EU can hardly keep up!

    Regards

    Charlie

    (PS I miss the feature to ‘Edit Post’ comments before posting – I guess we just have to proof read carefully!)

  12. zoobulz
    May 22, 2012 at 4:37 am | #12

    We’ve just had a baby in Budapest. She’s only six weeks old, but I’ve already noted a number of more effective things that the Hungarian government could do to promote families in Hungary. I’ll list a few of them here.

    1) Making cities more pushchair-friendly by cleaning the damn streets more than once every two years, installing escalators at subway underpasses, and repairing the cracks in the pavements. Money could be found for this I’m sure, by cancelling things like George Bush statues, Kossuth Ter renovations, Peace March buses from Poland, etc. etc.
    2) Making sure doctors and midwives get a decent salary. This would mean that parents (who could afford to do so) wouldn’t feel obliged to stuff an envelop with cash and give it to medics when the taxman isn’t looking. Traditionally, I believe this is ‘arranged’ in advance with the medics before birth, who discuss how much they should receive.
    3) Funding hospitals would be nice too. Even one of Budapest’s better hospitals can’t manage to stock soap or WC paper in its bathrooms. Patients should bring their own.
    4) Subsidising the cost of baby products (diapers, maternity equipment) which are far more expensive in shops here than in the UK.
    5) And most bizarrely, my wife is on maternity leave, and gets maternity pay. We also have a BT, with which I would normally invoice for my work, as a freelance. However, while my wife gets maternity pay, this BT cannot be used. In effect, her husband (me) cannot receive any income during this time. (Unless we find convoluted and expensive ways to ‘trick’ the system.)

    I’m not even going to mention the education system here, which is seeming less desirable every time I check the news. (I’m very thankful for this incredibly informative blog, by the way.)

  13. zoobulz
    May 22, 2012 at 5:06 am | #13

    We’ve just had a baby in Budapest. She’s only six weeks old, but I’ve already noted a number of more effective things that the Hungarian government could do to promote families in Hungary. I’ll list a few of them here.

    1) Making cities more pushchair-friendly by cleaning the damn streets more than once every two years, installing escalators at subway underpasses, and repairing the cracks in the pavements. Money could be found for this I’m sure, by cancelling things like George Bush statues, Kossuth Ter renovations, Peace March buses from Poland, etc. etc.
    2) Making sure doctors and midwives get a decent salary. This would mean that parents (who could afford to do so) wouldn’t feel obliged to stuff an envelop with cash and give it to medics when the taxman isn’t looking. Traditionally, I believe this is ‘arranged’ in advance with the medics before birth, who discuss how much they should receive.
    3) Funding hospitals would be nice too. Even one of Budapest’s better hospitals can’t manage to stock soap or WC paper in its bathrooms. Patients should bring their own.
    4) Subsidising the cost of baby products (diapers, maternity equipment) which are far more expensive in shops here than in the UK.
    5) And most bizarrely, my wife is on maternity leave, and gets maternity pay. We also have a BT, with which I would normally invoice for my work, as a freelance. However, while my wife gets maternity pay, this BT cannot be used. In effect, her husband (me) cannot receive any income during this time. (Unless we find convoluted and expensive ways to ‘trick’ the system.)

    I’m not even going to mention the education system here, which is seeming less desirable every time I check the news. I’m very thankful for this incredibly informative blog, by the way …

  14. May 22, 2012 at 5:24 am | #14

    Apparently both!

  15. Ron
    May 22, 2012 at 6:23 am | #15

    zoobulz: It seem to me that nothing was changed the last eight years. Regarding you point 5, why don’t you incorporate a second BT for you as working partner and your wife as a silent partner.

    As to the story re. pensions. It seems to me that it will be a cigar from own box. First they steal it, and than under conditions they give some back.

    Btw what about people whose children are abroad or in prison, in fact who are “not” adding value to the Hungarian economy? They will be discounted, as it is “always” the parents mistake.

  16. An
    May 22, 2012 at 6:34 am | #16

    If the whole idea is that a person’s old age living standard should depend on the number of children he raised, than there is no need for a state pension system at all. Just go back to the “good old times” before Bismarck introduced the first state pension system, where simply offsprings take care of the elderly. For a better effect, you can make that compulsory (I think Fidesz was already contemplating to put that into law.. that children have to support they parents in their old age). This would be a lot cheaper (on the state).

    No, I’m not seriously suggesting this, just applying their logic.

  17. wolfi
    May 22, 2012 at 6:40 am | #17

    This is really unbelievable. To show my anger (I did not father any kids but helped raise my wife’s from her first marriage, also financed several grandchidren in germany and now I’m helping my Hungarian wife’s son and his bab …) I put a cynical comment on pol.hu:

    I’m only doing this for your pension, said the rapist to the girl …

  18. CharlieH
    May 22, 2012 at 7:16 am | #18

    London Calling!

    Hi Zoobulz! – Please explain what ‘BT’ is? It doesn’t immediately click to us in the UK?

    Your description rings true – I was in Budapest recently – on foot, and the streets do seem very dirty and in disrepair. In addition I visited someone in hospital – No toilet paper and……. no lights – couldn’t see!! Judging by the smell no one else could either!l – and this a hospital too.
    But Hey! – I loved that cute underground system!

    Regards

    Charlie

  19. May 22, 2012 at 7:28 am | #19

    Great. So how about:
    - husband divorces wife because wife cheats (so it is not the husband fault according to the Catholic church),
    - the court leaves the child with mom as she has a steady income (husband is laid off)
    - mother remarries and they raise the child with new husband happily to the age of ten
    - mother divorces again and the real father raises the child with new wife until the age eighteen, as first wife is out of work .
    Quadruple dipping on the same child?

  20. zoobulz
    May 22, 2012 at 7:28 am | #20

    In the UK, you just declare yourself ‘self-employed’ get a unique tax reference number and away you go. If your annual income is going to be over a certain amount (I forget what, maybe £70,000) then you need to register as a limited company and get a VAT status.

    In Hungary, if you wish to invoice clients for your services, even if you’re earning 47,000 forints a month, you need to set up your own company (a Bt.) in order to provide an invoice. And it has to include a major and a minor partner. And it’s all rather complicated and time-consuming with loads of paperwork involved.

  21. CharlieH
    May 22, 2012 at 7:44 am | #21

    London Calling!

    Thank you Zoobulz – good explanation – illuminating. Sounds like a good reason to avoid invoices!

    And the VAT threshold is £75K here – 26,250,000 Forint!

    (Sorry if this post is out of chronological order – but you replied as a quote and it doesn’t seem to allow a response)

    Regards

  22. Smithborough
    May 22, 2012 at 8:22 am | #22

    Hungary is not the US or the UK. According to the CIA World Factbook Hungary’s birth rate per woman is 1.41, compare that with the UK’s 1.91 and the US’s 2.06. If Hungary continues with a birth rate this low it will end up with a tiny young population attempting to support a large ageging population. In other words increasing the birth rate is an economic and social necessity, not merely the fickle whim of some misguided eugenic or Catholic ideology.

    I’m not convinced that upping the pension rates is the way to increase births, as no government can bind its successors to fulfil their end of the bargain. Tax breaks and subsidies to families with children would be a more sensible solution to take some of the economic pressure off child rearing.

  23. Smithborough
    May 22, 2012 at 8:28 am | #23

    Regarding self-employment: Hungarian bureacracy does everything it can to penalise honesty and reward recourse to the black economy. The whole “invoice” scam is an example of this.

  24. May 22, 2012 at 8:46 am | #24

    A bit off topic. I devised a new logo for Hungarian Spectrum which you might want to see. Look for it in Facebook under Hungarian Spectrum. The logo is the parliamentary building in national colors that also gives the effect of a spectrum.

  25. Ron
    May 22, 2012 at 9:07 am | #25

    A Bt is a partnership where is a working partner(s) and a silent partner. This legal form does not exist in the UK. In Germany it is called a KG. Kommandit gesellschaft. The ownership is not based upon shares, in general the working partner is a natural person and fully (read: personal) responsible for all liabilities. The silent partner is only limited in responsibility for the amount of money invested in this partnership. A famous BT or KG is until recently C&A retail outlet.

    However, an entrepreneurial ship is still possible in Hungary, however, as pointed out it is not wise to do that in Hungary.

  26. Kirk
    May 22, 2012 at 9:12 am | #26

    @: Smithborough Well, the US, the UK and Canada encourage immigration.. where as this government seems to not only discourage it, it seems intent on creating conditions that even the locals want to escape from.

    These ideas are discriminatory and racists at best. Lets hope they don’t see the light of day.

  27. Smithborough
    May 22, 2012 at 9:32 am | #27

    I think that this business structure does exist in the UK, where it is called a Limited Partnership and is regulated by the Limited Partnership Act 1907, see:

    http://www.legislation.gov.uk/ukpga/Edw7/7/24

  28. Dubious
    May 22, 2012 at 11:02 am | #28

    If you are looking at starting a new company, you should investigate a Kft. It is much more flexible than a Bt., better tax-wise and doesn’t require a Hungarian co-owner.

  29. wolfi
    May 22, 2012 at 11:16 am | #29

    Maybe a bit OT – but not too much, because it’s about Hungary’s young people:

    There’s a report at Spiegel online on the consequences of the new rules for students.
    http://www.spiegel.de/schulspiegel/ausland/bildungsreform-in-ungarn-regierung-orban-laesst-abiturienten-fliehen-a-834190-6.html

    It seems that more and more young Hungarians want to begin their studies at universities outside Hungary – so the brain drain starts even earlier now …

  30. May 22, 2012 at 11:25 am | #30

    Eva, can you change the “nest” format to “flat”, please.
    Right now with the “nest” format we have to scroll through the whole thread in order to make sure that we read every response, as replies are grouped (nested) together wit that particular reply.
    The “flat” format would still allow responses, but just like on the old blog all the comments will come up in chronological order.

  31. May 22, 2012 at 11:35 am | #31

    Some1, I unticked the nest function. I hope that will do.

  32. CharlieH
    May 22, 2012 at 11:48 am | #32

    London Calling!

    I liked the nest function, Eva. You can target specific comments – it’s good! (Apologies Some1!)

    You can keep an eye on contributions from the contributor’s log top right – and clicking takes you direct to the new entry – unlike typepad!

    Maybe you need a vote? – See what others think?

    And yes – the ‘spectrum-Parliament-Building’ looks great! Red/White/Green.

    It gets my vote!

    Regards

    Charlie

  33. tgrnt
    May 22, 2012 at 12:33 pm | #33

    They have a way to be not only stupid, but offensive too, so I wouldn’t put it past them to implement such a thing.

    Loving the logo.

  34. May 22, 2012 at 12:54 pm | #34

    CharlieH :
    London Calling!
    I liked the nest function, Eva. You can target specific comments – it’s good! (Apologies Some1!)

    Yes, but you can still targets specific comments this way. It is very hard to keep tab from the side bar who’s comments on which topic you have read. If it is a “short thread” it would not be painful with nesting, bit of you hit some of those topics where you have 50 replies, everyone will loose track while scrolling up and down.

  35. CharlieH
    May 22, 2012 at 1:52 pm | #35

    London Calling!

    Eva – just a test check.

    I thought the ‘post comments’ on this post started with a point about Ceaucescu? (GDF I think?)
    Did it drop off – or am I living in a parallel universe?

    Regards

    Charlie

  36. May 22, 2012 at 3:42 pm | #36

    It is there, Charlie. #3 on the list.

  37. May 22, 2012 at 5:08 pm | #37

    CharlieH :
    London Calling!
    I liked the nest function, Eva. You can target specific comments – it’s good! (Apologies Some1!)
    You can keep an eye on contributions from the contributor’s log top right – and clicking takes you direct to the new entry – unlike typepad!
    Maybe you need a vote? – See what others think?
    And yes – the ‘spectrum-Parliament-Building’ looks great! Red/White/Green.
    It gets my vote!
    Regards
    Charlie

    Me too – the nest function made it easier to keep track of a particular debate and stopped the confusion of not knowing which post someone was replying to.

  38. May 22, 2012 at 5:12 pm | #38

    “By that time, I hope, Orbán and his college friends will be only a bad dream.”

    It’s only 20 years away, so I wouldn’t get too optimistic…

    Incidentally, as a father of 5, I’ve spent most of the last 20 years feeling guilty that I was being un-green by adding to the Earth’s over-population. But now I suddenly find I’m a hero for providing the workers of tomorrow who will generate the taxes to keep us oldies going.

    Strange world.

  39. May 22, 2012 at 6:10 pm | #39

    So, what should I do? Some likes he nest function and others don’t. The problems with democracy!! You understand, don’t you, why Viktor Orbán hates it. Big smilies which for the time being I can’t produce here.

  40. May 22, 2012 at 8:48 pm | #40

    Eva S. Balogh :
    So, what should I do? Some likes he nest function and others don’t. The problems with democracy!! You understand, don’t you, why Viktor Orbán hates it. Big smilies which for the time being I can’t produce here.

    Well, then put it back on, and see how it works out. If most people will prefer it, I can deal with it.

  41. Kirk
    May 23, 2012 at 4:13 am | #41

    I vote nested

  42. Lutra lutra
    May 23, 2012 at 4:25 am | #42

    Those with the highest salaries tend to be those with the fewest (often no) children, so they can afford to provide for their old age with private pensions. But hang on, the thieving Fidesz bastards closed them down and stole the money so what are we supposed to do now? If Parliament was cretinous enough to pass this latest scheme into law the Ombudsman (never mind the European Court) would I’m sure rule on that one.

  43. Odin’s lost eye
    May 23, 2012 at 1:25 pm | #43

    Oh Bother you cannot paste fron MS Word (or anything else) WHY? Cannot even post my picture

  44. May 23, 2012 at 1:45 pm | #44

    Odin’s lost eye :
    Oh Bother you cannot paste fron MS Word (or anything else) WHY? Cannot even post my picture

    Did you sign up? I have no problem with cop and paste function.
    For pictures, click on your username at the top. My Settings will open up.
    Click on Public Profile
    Click on Change your Gravatar (you can upload any size of pictures from your computer, as the program will resize.)

  45. May 23, 2012 at 1:56 pm | #45

    Those who surrendered to Orban’s blackmail 18 months ago when he raided their pension nest eggs must be now really kicking themselves.

    Viktor promises you a happy retirement if only you’d give him your hard-earned gains- and 97% of the taxpaying population bent over backwards and did just that, handing him over their only feasible hope for the future.

    Never mind no sane (and there’s a clue) government can guarantee anything for their citizens that far into the future, if the typical Hungarian doesn’t know by now that an Orban promise has the same approximate worth as a used piece of toliet paper then, really, they deserve everything this regime of reprobates and clowns deposits on them.

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