Part I — Situation overview

On 9 October the Ministry of Finance put out for public consultation the seven draft regulations of the January 2027 package of increases in pensions and social benefits. The content of the package was already known from the minister’s announcement of 1 October: the old-age minimum pension of 28,500 forints, unchanged since 2008, rises to 120 thousand forints, and pensions below 146 thousand forints receive a tiered increase. The novelty lies in the details. According to Portfolio’s summary, the draft government decree also sets guaranteed final amounts of 137, 140 and 143 thousand forints in the 125–140 thousand forint brackets — so-called intermediate minimums. Under the draft, from 2028 the minimum pension rises every January by the rate of the regular pension increase. Disability and rehabilitation benefits rise by 10 per cent; for disability benefit recipients over 65, the small-pension brackets would also apply. The government’s impact assessment counts 455 thousand people receiving a pension or pension-type benefit, 238 thousand people with reduced work capacity and 8,500 people eligible for the old-age allowance, and puts the first-year cost at 122.9 billion forints. In his video of 12–13 October, Finance Minister András Kármán spoke of nearly one million elderly people living in severe deprivation.

MIAK’s analysis of 28 August (A minimum pension of 120 thousand forints: the direction of the rise is beyond dispute, but the rule for it is still missing) pointed to three gaps: there is no indexation rule, the position of disability benefits is unclear, and there is no published impact calculation. The post of 3 October (The cabinet meeting at Erdőbénye: tiered utility prices, a deficit path that includes the interest bill, a price tag on every promise) put the 123 billion item into the 2027 cost table. The package of 9 October gives some kind of answer to all three of the August questions. Today, 19 October, the Prime Minister presents the 2027 budget in the National Assembly; the rate of the regular January pension increase may become clear from it.

MIAK’s reading: the package of drafts has solved the problem of the floor being frozen — but only that of the floor. According to public reports, the linked thresholds raised together with the minimum pension — the income limits of the old-age allowance, the smallest amounts of the orphan’s benefit and the widow’s pensions, the base amount of disability benefits — do not receive annual value-tracking. The impact assessment gives an aggregate figure, but does not show how many people are in each bracket, where they live, or what the cost will be after 2027. The latter is significantly affected by the still undecided 14th-month pension.

Part II — Grounding in the literature

The European Commission’s factsheet on pension adequacy sets out two theses that directly concern the current draft. According to one, in several member states the guaranteed minimum old-age income does not even reach half of the poverty threshold. According to the other, indexation of pensions that lags behind wages worsens the relative position of the most vulnerable in the long run. The October 2025 Fiscal Monitor report of the International Monetary Fund (IMF) works with the concept of spending rigidity. By this it means that legally mandated expenditure, pensions among them, can hardly be changed in the short term. According to the IMF, the countries that reduced this rigidity are those that require new spending to be offset within a multi-year budgetary framework. The memoir of Lee Kuan Yew (founding Prime Minister of Singapore, 1959–1990) argues from the opposite side. He considered old-age savings accumulated in workers’ individual accounts to be fair, because they do not shift the burden onto the next generation. Taken together, the three sources outline the two poles of the Hungarian debate: the floor protects against poverty, but every permanent additional expenditure laid down in law binds future budgets. The detailed discussion of the literature — author by author, with quotations — is in section 6.4 Literature in detail.

Part III — MIAK’s concrete proposal

MIAK proposes three measurable steps. None of them calls the announced increase into question. All three can be fitted into the finalisation of the draft regulations now under consultation or into the parliamentary debate on the 2027 budget bill.

3.1 A common value-tracking rule for the linked benefit thresholds (by the promulgation of the regulations, December 2026)

From 2028 the package of drafts ties the minimum pension to the regular pension increase. This removes the direct cause of the 2008 freeze. The package, however, also raises other amount thresholds. The income limit of the old-age allowance will be 75 thousand forints for married couples or cohabiting partners, 88 thousand for single people under 75, and 118 thousand forints for single people over 75. The smallest amount of the orphan’s benefit will be 60 thousand forints, the lower level of 30 per cent widow’s pensions 36 thousand, and that of 60 per cent widow’s pensions 72 thousand forints. The base amount of disability benefits rises to 162 thousand forints. Public reports do not make clear whether these thresholds would also move together with pensions from 2028. MIAK proposes that the final regulations tie all of them to the same rule as the minimum pension. Elements at the level of statute are decided by the National Assembly on the Government’s proposal; the rest can be settled in the government decree. MIAK also proposes that the law require a review every two years of the ratio between the floor and the poverty threshold. The regular pension increase today tracks inflation, so in times of real-wage growth the relative value of the floor falls. The EU factsheet also highlights this risk (see 6.4.1). The proposal is a direct application of the SZ13 pension-adequacy programme point, and in 2027 it involves no additional cost.

3.2 A breakdown of beneficiaries by bracket and by region, and a cost path to 2030 including the 14th-month pension (before the final vote on the budget bill)

The government’s impact assessment gives three aggregate headcounts and a first-year cost. MIAK asks the Ministry of Finance to publish the bracket-by-bracket breakdown before the final vote. This would show how many people are lifted to 120 thousand from the bracket below 108 thousand forints, and how many are in the 108–125, 125–130, 130–135, 135–140 and 140–146 thousand brackets. The breakdown should also show the distribution by county and district, following the logic of the DM1 demographic data platform. The breakdown should also include a 2027–2030 path. This path should contain not only the minimum package, but also the scenarios for the 14th-month pension. According to Portfolio’s estimate, a full 14th-month payment would cost roughly 600 billion forints a year. Between a gradual build-up and freezing it at the 2026 level of a quarter of a month, the difference over four years is some 1,350 billion forints. That is more than ten times the first-year cost of the minimum package. The 14th-month decision thus has a greater effect on pension spending than the minimum increase itself. MIAK’s post of 3 October asked for a cost table promise by promise; this proposal breaks that down for the pension package, from a distributional point of view. The IMF’s analysis of spending rigidity (see 6.4.2) recommends precisely this kind of multi-year presentation of such permanent items. This is an application of the G20 impact-assessment and G23 debt-sustainability programme points.

3.3 A catch-up timetable for disability benefit recipients under 65 (by 30 June 2027)

Under the draft, disability benefit recipients under 65 get only the 10 per cent increase, not the tiered catch-up. The catch-up does not apply to exceptional disability benefits either. According to data from the fact-checking portal Lakmusz, cited by Telex, 242 thousand people today receive a pension or disability benefit below 120 thousand forints, 115 thousand of them as disability benefit. The group remaining below 120 thousand forints may therefore still be significant after the package. MIAK proposes that the Government publish a timetable for this group by mid-2027: how many people it affects, what amounts are involved, and in what steps they can catch up. The timetable should also pay attention to work incentives. The catch-up should not cause a person who takes up paid work alongside a rehabilitation benefit to lose income abruptly at a threshold. The increase should taper off gradually as earnings rise, in line with the FO11 self-sufficiency incentives programme point. Lee Kuan Yew’s argument (see 6.4.3) is not a counter-argument here but a design consideration: support should not compete with work. The same is worth examining for people working alongside their pension, because the impact assessment gives no data on this. The proposal follows the principle of SZ7 dignity-based social policy: the automatic, application-free increase in the package is a good model, and it should be extended to the group left out.

One principle links the three proposals: a rule protects only if it covers the whole benefit chain, not just its most visibly important element. The freeze does not disappear if the floor is indexed but the thresholds around the floor are not. It shifts to the less closely watched benefits.

Part IV — Expected effects and risks

Dimension Expected effect Risk
Social The lowest pensions rise to a multiple of their current level in a single step; the intermediate minimums eliminate the situation in which, at the bracket boundaries, a higher starting pension yields a lower final amount According to Portfolio, the draft brings certain amounts to the same level, so part of the earlier differences between pensions disappears; the group of people who feel this is unfair on the basis of their contributions may grow
Budget The first-year cost (122.9 billion forints) is known and plannable at the level of the package Automatic indexation from 2028 is a permanent expenditure that is hard to reverse; the decision on the 14th-month pension is a bigger item than the package itself
Public administration The increase is automatic and requires no application Without a separate rule, the linked thresholds may lose value again; disability benefit recipients under 65 may remain below 120 thousand forints even after the package
Employment The increase in rehabilitation benefit improves the livelihood of people with reduced work capacity Abrupt thresholds may make taking up work less attractive; there are no data on people working alongside their pension

The main dilemma lies between adequacy and rigidity. Every element that permanently protects the floor — automatic indexation, moving the linked thresholds together — also binds future budgets. In MIAK’s view this is an acceptable price if the commitment is public and the path is visible in figures. The proposal can, however, become risky if the full incorporation of the 14th-month pension and the Pensioners’ SZÉP card enter the budget at the same time without offsetting. According to Portfolio, András Kármán earlier put the cost of the SZÉP card at 350–400 billion forints a year. In that case the advantage of targeting that starts with the lowest benefits may be lost next to larger, less targeted items. The detailed path is therefore not a bureaucratic add-on, but the condition under which the minimum package remains financeable in the long run.

Part V — Measurability and summary

5.1 What is worth following? (suggested KPIs)

MIAK proposes following these key performance indicators (KPIs):

  • Rule for the linked thresholds: whether the promulgated regulations state, by 31 December 2026, that the income limits of the old-age allowance, the smallest amounts of the orphan’s benefit and the widow’s pensions, and the base amount of disability benefits rise every year together with pensions (yes/no).
  • Bracket-by-bracket breakdown: whether, before the final vote on the 2027 budget bill, the number of beneficiaries in the six increase brackets is public by county, together with the 2027–2030 path including the scenarios for the 14th-month pension (yes/no).
  • Ratio of the floor to the poverty threshold: the ratio of the minimum pension to the poverty threshold published by the Hungarian Central Statistical Office (KSH) should not be lower in 2029 than in 2027.
  • Old-age poverty risk: the at-risk-of-poverty rate of people over 65, according to the KSH income survey, should fall by 2028 compared with the 2026 value.

5.2 Summary

MIAK’s main message: the package of drafts of 9 October has met most of the three conditions asked for in August. There is an annual rule for the floor, the fate of disability benefits has been stated, and there is a published impact calculation. The work, however, is only half done. MIAK asks that the final regulations also tie the linked thresholds to the same value-tracking. The Ministry of Finance should publish, before the final vote, the bracket-by-bracket and regional breakdown, as well as the path to 2030 calculated together with the 14th-month pension. And a timetable should be prepared for disability benefit recipients under 65.

Two of MIAK’s foundational values are at stake here. Data-drivenness, because a permanent expenditure of 122.9 billion forints already in its first year can only be decided responsibly on the basis of bracket-by-bracket and multi-year data. Transparency, because the rule protects only if the public can check afterwards whether the floor and the thresholds tied to it really move together.

Part VI — Reasoning and further sources

6.1 Press framing by spectrum

Business press. The most detailed coverage of the topic is Portfolio’s. Its article of 9 October (Váratlan ajándék a Tisza-kormánytól: sok nyugdíjas még nagyobb emelést kap januárban) presents the intermediate minimums as the main novelty of the draft, in a favourable light. At the same time, it notes that the draft brings certain pensions to the same level. The analysis of 13 October (Mi lesz a 14. havi nyugdíj sorsa?) places the package within pension spending as a whole, with Polish and Slovak examples. On the same day the outlet also reported on the Finance Minister’s video (Kármán András szerint nagyon nehéz helyzetben van egymillió magyar nyugdíjas). The framing is technical and budgetary: who gets how much, and what it costs.

Left-liberal band. In its article on the announcement of 1 October, Telex used Lakmusz data to nuance the figure of 700 thousand beneficiaries. It highlighted that a significant part of the benefits below 120 thousand forints are disability benefits, and that pensions above this level are not adequate either. HVG published the announcement bracket by bracket, together with the amount thresholds of the old-age allowance. Népszava focused on another form of pension supplement, the life annuity paid on the basis of one’s home (title-level reference only). The framing of this band is adequacy: is the increase enough, and is anyone left out?

Public-affairs band. The 24.hu article of 13 October (Megoszthatja a nyugdíjasokat a kormány nyugdíjemelési terve) asked pension experts. According to the outlet their assessment is mixed; according to the article’s subheading, the tiered increase is good but not enough. The full text of the article could not be downloaded publicly. ATV focused on the payment calendar, in a service-journalism style (the article could not be downloaded publicly).

Conservative band. Magyar Nemzet’s article of 1 October (Kármán András ismertette a korábban kritikák özönét kiváltó nyugdíjemelés részleteit) also presented readers’ reactions. Their main argument is that a pension is a right earned through contributions, and that a socially based increase is unfair to those who paid in more. MIAK’s press monitor of 13 October contained no article from a conservative outlet on the package of drafts of 9 October.

6.2 Facts and data

The tiered increase of January 2027 according to the package of drafts (applied to the amount after the regular January pension increase; Portfolio, 9 October 2026):

Pension after the regular increase Increase Guaranteed final amount
below 108 thousand forints top-up HUF 120,000
108–125 thousand forints +HUF 12,000 —
125–130 thousand forints +HUF 10,000 at least HUF 137,000
130–135 thousand forints +HUF 8,000 at least HUF 140,000
135–140 thousand forints +HUF 6,000 at least HUF 143,000
140–146 thousand forints top-up HUF 146,000
above 146 thousand forints no separate increase —

Related benefits according to the package of drafts (Portfolio, 9 October 2026; HVG, 1 October 2026):

Benefit Current From January 2027
Old-age minimum pension HUF 28,500 HUF 120,000; from 2028 rises every year with the regular pension increase
Disability and rehabilitation benefit — +10%; over 65 also tiered catch-up
Disability base amount HUF 147,175 HUF 162,000
Smallest amount of orphan’s benefit HUF 50,000 HUF 60,000
30% widow’s pension (at most HUF 32,400) — HUF 36,000
60% widow’s pension (at most HUF 64,800) — HUF 72,000
Old-age allowance, income limit (married/cohabiting) HUF 37,165 HUF 75,000
Old-age allowance, income limit (single, under 75) HUF 43,700 HUF 88,000
Old-age allowance, income limit (single, over 75) — HUF 118,000

Beneficiaries and cost. According to the government’s impact assessment, the package affects 455 thousand people receiving a pension or pension-type benefit, 238 thousand people with reduced work capacity and 8,500 people eligible for the old-age allowance. The first-year cost is 122.9 billion forints (Portfolio, 9 October 2026). On 1 October the Finance Minister spoke of more than 700 thousand beneficiaries and 123 billion forints. According to Lakmusz data cited by Telex, 20 thousand people receive a pension or disability benefit below 40 thousand forints. 242 thousand are below 120 thousand forints, 115 thousand of them as disability benefit.

Pension spending and prices. According to András Kármán’s video, Hungary spends less than 6 per cent of gross domestic product (GDP) on old-age pensions, against an EU average of 9–10 per cent; in the early 2010s the Hungarian ratio was still close to 7.5 per cent. Between 2020 and 2025 the general price level rose by 50 per cent and food prices by 82 per cent (Portfolio, 13 October 2026). The rate of the regular January 2027 increase is not known; the September forecast of the Magyar Nemzeti Bank (MNB, the central bank) assumes average inflation of 3.1 per cent in 2027 (Portfolio, 9 October 2026).

13th- and 14th-month pension (Portfolio, 13 October 2026): in 2026 the 13th-month pensions and benefits cost 579.3 billion forints, and the quarter-month instalment of the 14th-month payment 144.8 billion forints. Under an unchanged legal environment, a full 14th-month pension would be due in 2027. The outlet cautiously estimates its cost at 600 billion forints a year. Between a gradual build-up and freezing it at the 2026 level, the difference over four years is of the order of 1,350 billion forints.

6.3 Policy dimensions

  • Social policy (programme points) — pension adequacy and value-tracking of the linked benefit thresholds; programme point ID: SZ13, SZ7, SZ1;
  • Economy (programme points) — impact assessment and a multi-year spending path, the budgetary impact of the 14th-month pension; programme point ID: G20, G23, G1;
  • Demography (programme points) — the regional distribution of beneficiaries, the benefit needs of an ageing population; programme point ID: DM1;
  • Employment policy and labour market (programme points) — work incentives for people with reduced work capacity and for people working alongside their pension; programme point ID: FO11.

6.4 Literature in detail

6.4.1 European Commission: European Semester Thematic Factsheet — Adequacy and Sustainability of Pensions

The European Commission’s factsheet examines the adequacy and the sustainability of pension systems together. Two of its findings relate to the present topic. The first concerns income minimums: in many member states the future pension of a person with low earnings and a short career remains below the poverty threshold, even with minimum guarantees. According to the factsheet:

“In a number of Member States, the minimum income provision amount guaranteed does not even reach half of the at-risk-of-poverty threshold.”

The second finding concerns indexation. According to the document, indexation of pensions that lags behind wages worsens the relative position of pensioners in the long run in most member states. This particularly affects women, because they live longer. The factsheet also states that those who cannot meet longer contribution requirements must be protected from poverty by separate instruments — a minimum pension or a minimum old-age income. And it regards survivors’ benefits as effective protection against impoverishment caused by the death of a partner. For the Hungarian package of drafts this means: the floor of 120 thousand forints and the increase in the widow’s minimums are the right direction by the EU yardstick. The regular pension increase tied to inflation, however, carries the risk the factsheet warns about. If wages grow faster than prices, the relative value of the floor falls year by year.

📖 Source: European Commission: European Semester Thematic Factsheet — Adequacy and Sustainability of Pensions

6.4.2 IMF: Fiscal Monitor — Spending Smarter

The IMF’s October 2025 Fiscal Monitor report examines the efficiency and composition of public spending. One of its central concepts is spending rigidity: what share of spending cannot be changed from one year to the next. According to the report, one source of rigidity is legally mandated spending, for example the pensions of an ageing population:

“Although some degree of spending rigidity can be beneficial […] rigidity may also arise from legally mandated expenditures, such as spending on pensions for aging populations.”

According to the IMF, in advanced economies roughly a third of spending cannot be changed in the short term. The countries that reduced this share — for example Canada, Estonia and Sweden — are those that require, within a multi-year budgetary framework, that new spending be offset in the following years. The report also mentions better targeting of social support as a source of fiscal space. Applied to the Hungarian package: automatic indexation from 2028 creates a permanent, rigid expenditure. This is acceptable in itself, and targeting that starts with the lowest benefits is also in line with the IMF’s recommendation. To keep the rigidity manageable, however, the multi-year path and the 14th-month pension must be presented together, as proposal 3.2 asks.

📖 Source: IMF: Fiscal Monitor — Spending Smarter: How Efficient and Well-Allocated Public Spending Can Boost Economic Growth (October 2025)

6.4.3 Lee Kuan Yew: From Third World to First

In the chapter A Fair, Not Welfare, Society of his memoir, Lee Kuan Yew describes the logic of old-age provision in Singapore. The system is based on the Central Provident Fund (CPF): the contributions of employee and employer accumulate in an individual account. According to Lee, the experience of the Western European welfare states showed that when the state takes over the basic obligations of the head of the family, individual effort weakens. He saw the advantage of the individual-account system in the fact that it is self-financing and does not shift the burden onto the next generation of workers. At the same time, Lee acknowledged that a small part of the population will always need help; they must be given the greatest possible independence. The Hungarian package of drafts follows a different logic: in the pay-as-you-go system the minimum increase is financed by the central budget. Lee’s argument here does not justify rejecting the floor. It supports the two design considerations that MIAK sets out in proposal 3.3: support should not compete with work, and the burden of permanent spending should be publicly priced. (The volume is not freely usable, so only a paraphrase appears here.)

📖 Source: Lee Kuan Yew: From Third World to First — The Singapore Story 1965–2000

6.5 International comparison

Portfolio’s analysis of 13 October presents two neighbouring models for payments on top of the pension. In Poland the 13th-month payment is a uniform amount for everyone, equal to the minimum pension. The 14th-month payment is due in full for pensions below 2,900 zloty; above that, every additional zloty of pension reduces it by one zloty. The combined cost of the two payments in 2025 was 0.77 times one month’s pension spending. In Slovakia the 13th-month payment is a fixed amount, which the government froze in nominal terms until 2028 as part of its budgetary adjustment. Both models show that the extra payment can be retained in a targeted way, tapering off gradually towards higher pensions. For the decision on the Hungarian 14th-month pension, these models are obvious benchmarks for the scenarios of proposal 3.2. And the Canadian, Estonian and Swedish multi-year budgetary frameworks mentioned by the IMF (see 6.4.2) show how permanent social spending can be handled with an offsetting rule.

Social policy

  • SZ13 — Pension adequacy and sustainability
  • SZ7 — “Dignity-based” social policy
  • SZ1 — Targeted support

Economy

  • G20 — Economic policy impact assessment system
  • G23 — Public debt sustainability framework
  • G1 — Data-driven budget

Demography

  • DM1 — Demographic data platform

Employment policy and labour market

  • FO11 — Self-sufficiency incentives

Proposed new programme point: A common value-tracking rule for the benefit thresholds linked to the minimum pension — for the Social policy area.

6.7 List of sources

Press sources (MIAK topic monitor, 18 October 2026 — topic 1; related MIAK press monitors: 2, 4 and 13 October 2026):

Knowledge-base references (literature):

  • 📖 European Commission: European Semester Thematic Factsheet — Adequacy and Sustainability of Pensions
  • 📖 IMF: Fiscal Monitor — Spending Smarter: How Efficient and Well-Allocated Public Spending Can Boost Economic Growth (October 2025)
  • 📖 Lee Kuan Yew: From Third World to First — The Singapore Story 1965–2000

MIAK internal materials:

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