Hungary

The instrument provides support to disadvantaged target groups in the labour market to participate in training in order to improve their labour market situation. The training is funded by the National Employment Fund and can be accessed through the National Employment Service. Public co-funding share is not defined by law but in practice amounts to 60%-70% on average. In addition to the course fee, other costs related to the training (e.g. travel cost, wage substituting allowance etc.) if justified, may also be financed from the National Employment Fund to the individuals.

The 'training contract' is a specific instrument of Hungarian labour law combining features of a training leave scheme and a payback clause. Employees have no formal right for paid or unpaid training leave in Hungary (with the exemption of participants of primary education). However, there is a tradition backed by the regulation of the labour code that employers and employees voluntarily agree on a training contract where employees may receive support for the direct costs of education and time off work (paid or/and unpaid) in order to acquire an agreed-on qualification, with the employee promising to stay with the employer for a defined period of time after graduation. The employer and the employees enjoy discretion in defining the elements of the training contract, with only a loose framework outlined in the labour code.

The payback clause is closely linked to the learning contract (training leave), in which employers and employees can agree on a payback clause. In general, payback clauses can be applied for any kind of training that has been undertaken voluntarily by the employee and is not mandatory as a part of the work activity. In a learning contract, the employee agrees to complete the studies and to refrain from terminating his employment by way of notice following graduation for a period of time commensurate for the amount of support, not exceeding five years. The leaning contract may be terminated by either of the parties with immediate effect in the event of subsequent major changes in the party's circumstances whereby carrying out the commitment is no longer possible or it would result in unreasonable hardship. In the event of termination by the employee, the employer may demand repayment of the support provided. The employer's right to demand repayment of the support shall apply in proportion to the length of time that has elapsed from the term of the contract. Where employment is terminated by the employer, repayment of the support may not be demanded. A payback clause is not valid in case the employee attends primary school to complete his basic school (Grade 8) education during the training leave.

The Student Loan Centre operates the system relying on the involvement of a tested and proven network of multiple partners. Raising the funds from the money and capital market, the student lending system has always operated with the State as the owner and according to the non-profit principle - in order to lend loans at the lowest possible cost. All higher education studies/degrees leading to a formal qualification are eligible. Eligible costs include either living costs (Student loan 1) or tuition fees (Student loan 2). Student loan 1 may be spent on anything freely (such as living costs). Student loan 2 is transferred directly from the Student loan centre to the higher education institution covering 100% of the tuition fees.

The vocational training contribution is a kind of training levy enterprises are required to pay. The base of vocational training contribution is the base of social contribution tax. The rate is 1.5 percent. Under the 2011 act on the vocational training contribution it can be paid in several ways: (a) by providing apprenticeship training to apprentices in upper-secondary VET and certain higher education programmes (b) by providing or financially supporting employees' training (up to 16.5% of the training levy), under certain conditions (c) by paying it into the National Employment Fund training sub-fund. Accordingly, to the 2011 act on the vocational training contribution, companies can allocate a part of their training levy to co-finance their employees' vocational and foreign language training. However, this option is only available for companies that also provide practical training to at least 30 apprentices (VET school learners), and only up to at most 16.5% of the amount of their training levy. Due to these strict criteria, only a few large companies make use of this measure.

Companies with employees whose regular employment cannot be ensured without training can apply for a state-funded grant between 70% and 100% to cover the costs of training these employees. The employer has to contribute to the costs of training and must continue the employment of the employee for at least the same period as the training. Employers may be awarded a grant by the local employment offices for all employment-promoting training that is covered by the Vocational Training Act or is regulated by official regulations. Eligible costs include fees and other costs related to education and training (costs of materials, travel, accommodation, etc.) and wage subsidy. Preferential treatment exists for employees above 45 years, as 100% of the costs are reimbursed to the employer. There is no limitation for re-use.