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Eurydice

EACEA National Policies Platform:Eurydice
Funding of early childhood education and public education

Hungary

3.Funding in education

3.1Funding of early childhood education and public education

Last update: 28 March 2024
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Funding

Since 2013, the funding of kindergartens and schools has effectively been separated. The majority of the kindergartens are managed by municipalities; the provision of kindergarten education is a mandatory municipal task, so it continues to be funded through the municipalities. In the case of state-maintained institutions, funding is currently carried out from the central budget through the school district centres. In the case of non-state maintenance entities (church, ethnic government, and private maintenance entities), funding is handled differently.

Funding of kindergarten education

The funding system is effectively two-tiered: most of the central budget subsidies go to the maintenance entities, who determine the expenditures of their kindergartens as part of their own budget. The funds required for operation are mainly provided by the state budget and the maintenance entity together. In some cases, this can be supplemented by fees for the services used by the children and the kindergartens' own revenue.

The amount of the normative contribution by the central budget is specified in the annual budget act. The maintenance entities are free to determine the budget of their respective institutions.

There are two forms of state support for the operation of kindergartens: normative and targeted support. Eligibility to normative support is a subjective right of kindergarten maintenance entities, while targeted support can only be obtained through application. Since 2013, instead of the former state support (based on the number of children), support based on the average wage has been introduced. From then on, the state has been providing wage support to several kindergarten teachers (teachers employed in kindergartens) and teacher assistants (those who directly assist in the educational work of teachers) calculated based on a complex formula.

New kindergartens can be built, and existing ones can be expanded through applications, for which the state budget establishes a separate budget.

Funding of primary and secondary education

The public education funding system changed fundamentally in 2013. The transfer of schools to the state affected both the available funds and their use. The most significant change is that the proportion of state funding has increased, and the schools' independent budgets have been eliminated.

In the new system – until the beginning of 2017 – the state provided full funding only for the financing of the education tasks (1) of the former municipality schools, typically the wages and the teaching material expenses directly linked to education. Other costs of operation (2), such as utility fees, the furniture, tools and equipment necessary for the performance of the core task of public education, expenses related to pupil care (meals, travel), and expenses related to the maintenance, renovation, expansion of buildings (3) were paid by the municipalities. In the case of villages with a population less than 3,000 people, the state automatically took over the operating costs, while in the case of larger towns, it did so upon request. The duality of funding caused conflicts in the day-to-day operation of public education institutions: many disputes and operational difficulties arose from the question of whether the state or the municipality should pay for the provision of certain tasks and equipment, and significant problems arose also due to the varying solvency of municipalities.

Even after the 2017 transformation of the system, the provision of school meals remained a mandatory task of the local municipality.

The 2017 restructuring resulted in the establishment of the system that still operates today: the cost item other costs of operation (2) is now paid by the state in its entirety, and the maintenance right of municipalities was terminated. Kindergartens are an exception because they remain under the maintenance of the municipality. Together with this, from 2017 the Act on the Annual Budget in force has been imposing a so-called solidarity tax on some municipalities in a better financial situation. From that year onwards, municipalities only have to pay the development and renovation costs (3) arising from the ownership of school buildings.

As a result of the decentralisation that took place on 1 January 2017, KLIK as an institution maintenance entity was replaced by (60) school district centres operating as independent budgetary units.

Funding of VET

An important change took place in secondary VET (ISCED 3) in 2015: the maintenance of schools offering VET programmes was initially placed under the Ministry for National Economy (NGM) responsible for vocational and adult training, then under the Ministry for Innovation and Technology established in 2018, and then from 2022, under the Minister responsible for VET in the Ministry of Culture and Innovation (Kulturális és Innovációs Minisztérium). Individual decisions were made regarding the classification of schools offering multiple programmes. As part of VET, art training is provided in vocational secondary schools, and the healthcare and social vocations, as well as the law enforcement and public service sectors, became the responsibility of the Ministry of the Interior. Training pertaining to the agricultural sector belongs to the Ministry of Agriculture. The homeland defence sectors fall within the supervision of the Ministry of Defence.

From 1 January 2020, Act LXXX of 2019 on VET (2019. évi LXXX. törvény a szakképzésről) (hereinafter: VET Act) entered into force, and on 15 February 2020 Government Decree 12/2020 (II.7.) implementing the VET Act (12/2020. (II.7.) Korm. rendelet a szakképzési törvény végrehajtásáról)  (hereinafter: VET Decree) entered into force; one of the most important goals of these legal regulations is to further develop the dual training model, to strengthen work-based learning, and to develop a more flexible VET system that can better adapt to economic changes. 

The new VET Act is based on the strategy adopted by Government Decision1168/2019 (III. 28.) called “VET 4.0 – Mid-term vocational policy strategy for the renewal of VET and adult training, the response of the VET system to the challenges of the fourth industrial revolution” (1168/2019. (III. 28.) Korm. határozat a „Szakképzés 4.0 - A szakképzés és felnőttképzés megújításának középtávú szakmapolitikai stratégiája, a szakképzési rendszer válasza a negyedik ipari forradalom kihívásaira” című stratégia elfogadásáról és a végrehajtása érdekében szükséges intézkedésekről). Its amendment was approved by the Government on the basis of Government Decision 1499/2023 (XI.16) (1499/2023. (XI. 16.) Korm. határozat a 2021–2027 programozási időszak kohéziós célú támogatásainak kifizetését lehetővé tevő 4.2 „A nemek közötti egyenlőséget célzó nemzeti stratégiai keret” és a 4.3 „Az oktatási és képzési rendszer minden szintjét felölelő stratégiai szakpolitikai keret” tematikus feljogosító feltételek teljesítését alátámasztó dokumentumokról). The 2019 reregulation of VET significantly transformed the VET system regulated by Act CLXXXVII of 2011 on VET. 

The changes were introduced in the system starting from the 2020/2021 academic year.

VET includes vocational education and vocational training. As part of vocational education, preparation for professions and partial vocations is offered. Professions refer to occupations pertaining to a given sector, which is defined in the Register of Vocational Qualifications as an Annex to the VET Decree. Instead of the 759 professions listed in the former registry (OKJ), in the new system, the Register of Vocational Qualifications contains 178 eligible basic vocations.  Vocational education ensures the acquisition of a professional qualification that entitles one to practice a profession. 

As for vocational training, their range can be determined freely, there is no register of these at regulatory level. A state-recognised professional qualification can be acquired in vocational training. 

Amendments to VET laws are intended to ensure the efficiency of the VET system, adapted also to economic and social changes: 

The system of cooperation in VET

The VET cooperation system is made up of the VET Innovation Council (Szakképzési Innovációs Tanács, SZIT), the sectoral skills councils (Ágazati Készségtanácsok) and the chambers of commerce.

The VET Innovation Council is of outstanding importance among the participants to the strategic coordination of interests, and it is a national body that assists the Minister of Culture and Innovation in carrying out his tasks related to VET, prepares decisions, formulates opinion, and makes recommendations. The purpose of its establishment is to support the further development of the Hungarian VET system.

The recommendations of the business organisations of the various economic sectors regarding the continuous development and modernisation of the content VET and the coordination of the labour market needs and the training on offer are represented by the sectoral skills councils. The Sectoral Skills Councils, which officially started to function in 2019, played a significant role in creating a training structure that meets modern expectations. The sectoral skills council continuously monitors the development of the VET structure, the economy, the labour market, as well as technical and technological processes in their respective sectors, and based on this, gives an expert opinion to the minister responsible for adult training in connection with the registration of the programme requirements for the vocational training, can make an elaborate recommendation regarding the register of vocational qualifications, the duration of vocational education, the programme outcomes standards and requirements and the content of the sectoral basic education, the development and content of a new VET textbook, and prepares a forecast to plan and define the short and medium-term development directions and goals of VET.

The sectoral skills council functions in the sectors specified in Annex 1 to the VET Decree, except for health, home defence, law enforcement and public service, sport and the social sector. The Hungarian Chamber of Commerce and Industry performs the secretarial tasks of the sectoral skills council, coordinates the operation of the sectoral skills council and ensures the conditions of its operation. 

The Chamber of Commerce and Industry is responsible for coordinating the activities of dual training sites in VET and ensuring their legal operation based on the VET Act. Among its tasks specified in the law, it should be highlighted that the Chamber of Commerce facilitates the signing of VET employment contracts, and to this end, it encourages business organisations to participate in VET, and it monitors the specialised educational activities of the dual training site and the intermediary it uses. In connection with specialised education, it develops the quality conditions for the registration of dual training sites and maintains the register of dual training sites. Registration falls within the competence of the regional chamber of commerce in whose territory the dual training site has its seat or premises serving the specialised educational purpose. The chamber’s tasks include delegating tasks related to examinations (such as the final exam and the basic sectoral exam), and participation in career counselling and career guidance activities. The Hungarian Chamber of Commerce and Industry is also responsible for preparation for international professional (and non-academic) competitions (WorldSkills, EuroSkills). From 2021, the Chamber of Commerce has no longer organised level exams, which has been replaced by the sectoral basic exams, organised by VET institutions. VET employment contracts that replace apprenticeship contracts are no longer required to be registered or countersigned by the chambers of commerce. 

In addition to the state, businesses also participate directly in the financing of VET, i.e. in addition to paying taxes to the state budget. Until 31 December 2021, this was based on the VET contribution payable by companies, the purpose of which was the development and support of dual training and practical training. 

As of 1 January 2022, the VET contribution ceased to be a separate type of tax and was integrated into the social contribution tax. As defined in Act LII of 2018 on the social contribution tax, the dual training site is entitled to claim a tax discount based on the proportionate self-cost of specialised education. 

According to the regulations currently in effect, the discount (pro rata cost per working day) can be claimed in proportion to the time spent at the training site on the days of specialised education conducted at the dual training centre, prorated to a daily working period of 7 or 8 hours.

The tax liability is reduced – provided that the student or training participant has passed the final exam – by an amount corresponding to twenty percent of the tax reduction legally claimed in respect of the VET employment contract signed for the duration of the specialised education and existing for a continuous period of at least six months.

In the VET new system of, the apprenticeship contract has been replaced by the VET employment contract. From the 2020/21 academic year, a new contract can only be signed as a VET employment contract; this, too, is undertaken by the student and a company, but under this contract, in addition to professional practice, the participant can also participate in theoretical professional training which also counts towards the service time. While previously the student only spent practice hours at the company, in the new system he will spend full working days there. With the VET employment contract, an employment relationship is established between the student or training participant and the dual training site. 

Under the VET employment contract, at the dual training site, the students receive a wage, which until 31 December 2021, was at least 60% of the monthly minimum wage. In the case of students with good results, this amount could even reach the effective minimum wage. From 1 January 2022, it will no longer be calculated on the basis of the minimum wage, but on the monthly amount of direct costs defined in the budget act: the amount of the monthly rate of wages paid on the basis of the VET employment contract – as agreed by the student and the dual training site – is the monthly amount of the direct cost of specialised training specified in the central budget act, but no more than one hundred and sixty-eight percent of it, which must be determined taking into account the student's professional preparation level and academic results.

The possibility of signing a preliminary student contract has also been eliminated. The student or training participant, prior to the specialised education, can enter into a preliminary VET contract with the dual training site, in which the parties undertake to enter into a VET employment contract at a later date. Before signing the employment contract, the dual training site can conduct a procedure to select the students who will participate in the training.

The legislative amendments of 2023 significantly affected the provisions on VET employment contracts. Under the current regulations, a VET employment contract can be signed with a student participating in specialised education or with a person participating in the training

a) for the duration of the specialised education or

b) no more than twice a year, for a fixed term of at least two and no more than twelve weeks each, but a total of no more than twelve weeks per year.

The daily working period of the student or the participant in the training is a maximum of eight hours a day, if the student or the participant in the training is a young worker, it cannot exceed seven hours a day (Amended by: Act XXXIII of 2023, Section 24 (12)). A working time frame of no more than four weeks can be ordered for the student or the training participant. 

The student or the training participant can participate in the specialised education at the VET institution or, with a VET employment contract, at the dual training site. Specialised education can be completed in the VET institution if the participation of the student or the training participant cannot be ensured in the specialised education at a dual training site. 

If a student does not have a VET employment contract on the last day of the first month of the academic year, it must be assumed that the student's participation in the dual training site in specialised education cannot be ensured. This fact is certified by the Chamber of Commerce upon request of the VET institution, in the manner specified in its internal regulatory instrument. Regarding vocational occupations pertaining to healthcare, national defence, law enforcement, public service and sports, the certificate is issued by the member of the Government responsible for the given sector. 

The register of dual training sites is kept by the Chamber of Commerce. Registration falls within the competence of the regional Chamber of Commerce in whose territory the dual training site has its seat or the premises serving the specialised educational purpose. An entity can be registered as a dual training site if it possesses the necessary personal and material conditions for the performance of specialised education.  The 2023 amendment to the act also provides an opportunity to register a primary agricultural producer as a dual training site. Facilitating the signing of a VET employment contract is the task of the Chamber of Commerce. In grades 11–13 of the five-year technicums, and grades 10–11 of the three-year VET institution, the specialised theoretical and practical education can be completed with an employment contract. 

 

The two state maintainers of the educational institutions (Klebelsberg Centre (Klebelsberg Központ) responsible for public education and the National Office of Vocational Education and Training and Adult Learing (Nemzeti Szakképzési és Felnőttképzési Hivatal) responsible for VET) handle the utilisation of state subsidies earmarked for education through school district centres, which are centralised, in 2017, they gained greater independence, and through VET centres established in 2015. The primary schools and secondary schools pertaining to the KK Centre have no independent budget. Since 2017, fewer school districts than before (60 instead of 196) can decide on the use of the funds independently, but in accordance with the guidelines set by the centre.

VET centres operating in vocational secondary education, as independent budgetary bodies, also have their own budget. The budget of the VET institution operating as a part of the VET centre must be planned in line with the average costs of the expenditure needs for the basic VET task provided by it, according to the level of public services expected to be provided by the VET institution.

The maintenance and budgetary conditions of VET centres have been affected by several changes in recent years. Based on the chancellery system introduced in 2019, the VET centres are operated by the new managers. The budget of VET centres was significantly expanded in 2020 in connection with the wage increase for professional educators. VET centres receive development and additional operating support from the National Employment Fund and from the chapter budgets of the ministry.

The VET Act LXXX of 2019 (2019. évi LXXX. törvény a szakképzésről) introduced a new concept in relation to persons teaching in VET (teachers, external lecturers employed under a services agreement, practice instructors). Starting from the 2020/2021 academic year, teachers teaching in VET institutions will be uniformly called “oktatók” (plural) in Hungarian. This means that in the VET institution, the tasks of teaching general knowledge, sectoral basic education and specialised education are performed by educators who are either employed by the VET institution or have a service contract as external lecturers with it. The new legal background therefore breaks with the previous rigid regulations that were bound to the act on the legal status of public servants, taking into account that the expectations relating to the VET system require the legal relationship and working conditions to flexibly adapt to the labour market, and that practitioners (engineers, economists, and other professionals) should be included as widely as possible in VET. At the same time, as of 1 July 2020, the legal status of teachers in VET has also changed; having been excluded from the scope of the Act on Public Servants, the provisions of the Civil Code and the Labour Code apply to them. Furthermore, they can keep their benefits as public servants, such as a teacher's certificate, number of paid vacation days, anniversary bonus, etc. The change in the legal relationship therefore had no adverse consequences for anyone. The reason for the change is that, as public servants, they were subject to the wages specified in the public servant wage chart, which are not competitive compared to the wages of the business sector. As of 1 July 2020, the wages in VET institutions increased significantly. HUF 35 billion were allocated from the state budget for wage increases, which ensured an average wage increase of 30%. The amount of increase varied for each employee. The new wage system is performance-based and affects approximately 32,000 people working in VET.

To ensure that the most up-to-date knowledge is taught by the most qualified teachers in VET institutions, they must participate in at least 60 hours of mandatory in-service training every four years from the 2020/2021 academic year. The in-service training is organised by the minister responsible for VET through the IKK Innovative Training Support Centre.The list of available training courses must be published on the website operated as part of the VET information centre. IKK Zrt. provides planning, coordination, organization and continuous review of the training and in-service training of trainers in vocational training at national strategic level. IKK has established and operates a nationally unified In-Service Training System (Oktatói Továbbképzési Rendszer, OTR) for the professional implementation of this task. The system contributes to the renewal of vocational training, helps to develop the digital competence of teachers and promotes the improvement of the quality of vocational education.  The in-service training of teachers in vocational education must be completed primarily in a company environment or training centre. Failure to fulfil the in-service training obligation may result in the termination of the teacher's employment contract. The teacher is exempted from the in-service training obligation if there are less than 5 years left until he or she reaches the legal retirement age. The in-service training obligation must be considered fulfilled by an educator who has obtained a higher-level qualification in higher-education VET as part of higher education or a specialised professional qualification in specialised continuing education. (Enacted by: Government Decree 292/2023 (VII. 6.), Section 22; (292/2023. (VII. 6.) Kormányrendelet a szakképzésben lezajlott átalakítás utólagos hatásvizsgálatából adódó kormányrendelet-módosításokról). Effective: from 7 July 2023)

The teacher is evaluated by the director of the VET institution every 3 years. VET institutions had to develop and implement the evaluation system for teachers as an element of their quality maintenance system until 31 August 2022. 

In the case of state-maintained institutions, VET institutions grouped into VET centres are financed from the budget line pertaining to the budget according to the Budget Act. 

The funds for the performance of basic tasks in VET are provided from the maintenance entity's own budget. The costs of the specialised education organised in the VET institution are borne by the maintenance entity; the costs of the specialised education organised by the dual training site are borne by the dual training site as specified in this act. The maintenance entity that has a cooperation agreement is entitled to the statutory subsidy, regarding the basic VET task or professional training provided in the VET institution or multi-purpose public education institution that it manages. 

A significant part of the VET system is financed by – a fund generated from the eligible part of the vocational training contribution and from the vocational training contributions, and from 1 January 2022 from part of the social contribution tax revenue –  of the “public funds earmarked for employment programmes” (hereinafter: Fund), in addition to funds from the central budget. 

Regarding the training subsection of the Fund, the minister responsible for VET 

a) decides on subsidies that can be provided from the basic training part of the Fund, based on individual decisions,

b) is responsible, in respect of the basic training part of the Fund,

ba) for the legality and control of its use,

bb) for ordering the collection of its revenues,

bc) for the collection of receivables, for the execution of financial guarantees,

c) performs other tasks related to the basic training part of the Fund, defined by law.

Under the regulations currently in effect, the basic training part of the fund includes

  1. budget funds for the subsidies that can be granted for the performance of tasks related to VET, the organisation, operation and development of VET, as well as for the payment of scholarships and one-off career start allowance for students of a VET institution. 

The training subsection

1. can be used, for providing basic VET task:

  1. for payment of scholarships for students of the VET institution, the one-off career start allowance and subsidy, with the exception of the law enforcement scholarship.

  2. for the full measurement of students’ basic skills.

  3. for reducing the early school drop-out of students in VET institutions, for bringing back dropped students to training, and for implementing talent care programmes.

  4. for ensuring mentoring support continuously in workshop schools  (Government Decree 292/2023 (VII.6.))

2. can be used, as part of operating VET:

  1. for the operating costs of the public VET institution and public administrative bodies of VET not covered by central subsidies.

  2. for supporting the investments and renovation of the public VET institution, the National Office of Vocational Education and Training and Adult Learning, and IKK Innovative Training Support Center Plc.

  3. for the discharge of the tasks of the National Office of Vocational Education and Training and Adult Learning and IKK Innovative Training Support Center Plc related to VET.

  4. for the discharge of the tasks of the Chamber of Commerce specified in the Act on Chambers of Commerce and the VET Act, and of the VET tasks specified in the agreement signed with the minister responsible for VET.

  5. for the operating costs and development of the training centres related to the dual training activities.

  6. for the development and operation of the VET information system.

  7. for financing the support activities related to methodology development,

3. can be used, as part of the promotion and development of VET:

  1. for activities related to the dissemination of information related to VET and the popularisation of VET.

  2. for the development of teaching materials and teaching tools and the development of central programmes necessary for the modernisation of VET.

  3. for organising national professional educational competitions and international professional competitions held in Hungary, and for the costs of Hungarian participation in international professional educational competitions, and related to this, for rewarding Hungarian competitors who win medals or special recognition at WorldSkills, EuroSkills or other international competitions.

  4. for the advanced training of educators.

  5. for implementing a central programme related to VET, based on the government's decision.

  6. for the pre-and co-financing of an EU-funded programme for VET.

It can also be used:

4. for funding the fees, expenses and costs specified in Section 39(4) of Act IV of 1991 on facilitating employment and providing unemployment support (1991. évi IV. törvény a foglalkoztatás elősegítéséről és a munkanélküliek ellátásáról).

Funding can be provided from the training subsection, based on application for funding:

  1. for the establishment of a school workshop for specialised educational purposes, if it is intended to operate as a training centre.

  2. for the development of the material conditions of specialised education provided in an existing school workshop of a training centre, which serves for specialised education.

Financing of adult training

Thanks to the structural change resulting from the legislative amendments that entered into force in 2020, financing options are differentiated based on the type of training the individual participates in. For someone who – regardless of age – enrols in training for a basic vocational occupation or, if the conditions of Section 3 of the VET Act (2019. évi LXXX. törvény a szakképzésről) are met, in training for acquiring a first vocational qualification related to VET, in a VET institution, the options listed in the section “Financing of VET” are available, e.g.: scholarship, VET employment contract etc. For a potential training participant who applies for VET outside the school system or other training covered by the Adult Education Act (2013. évi LXXVII. törvény a felnőttképzésről), the following financing options are available under the Adult Training and Education Act:

  1. Training loan: From May 2021, training loan is available to participants in vocational training outside the school system or in training for a partial vocation. While at the start, the Training Loan could be requested to finance both the tuition fee and living expenses, after the experiences of the first six months, after 20 December 2021, only an interest-free training loan covering the fee of training is available. 

  2. Scholarship: The 2020 amendment of the act also created the possibility for the scholarship to be available to participants in adult training, but at the same time, this was to be understood as a matter between the training provider and the training participant. In contrast to education in the school-based system, the scholarship in adult training is considered taxable income. 

  3. Subsidy programmes: In recent years, numerous Hungarian and EU-funded subsidy programmes have been launched to support the training of the Hungarian population. As part of the 2022 amendment of regulations, the adult training part of the National Employment Fund's basic part for employment and adult training was established. For the time being, this change is only at a regulatory level, but it creates the possibility for the Hungarian central budget subsidies to open up again for participants in adult training. At the same time, there are various subsidy programmes funded by the European Union, mainly related to employment goals, aimed at encouraging training. 

In terms of financing, it is important to mention that, in the case of adult training, training courses organised based on the law are also exempt from VAT, if they comply with their reporting obligations, and language training, as well as the organisation of professional training and training for partial vocations.

Financial autonomy and audit

The financing of kindergartens depends on the income-generating capacity of the local municipality. Since 2013, the state has been playing a significant role in wages, and it is performed according to uniform criteria. Today, the different financial situation of the maintenance entities is evident mainly in the differences in kindergarten infrastructure and equipment. The financial independence of kindergartens varies and depends on the local municipality that maintains them.

In larger settlements, it is typical for kindergartens to be combined into a large organisational unit, which can also be accompanied by financial independence in the large kindergarten organisation formed in this way. In smaller settlements, there is little chance for the financial-economic independence of small kindergarten units. There are also kindergarten units covering several settlements that work in different maintenance and financing systems. In smaller settlements, it used to be common to merge the kindergarten and primary school into one organisation. This possibility ended in 2013 when the school maintenance tasks were taken over by the state.

In the case of public education institutions operating under the maintenance of school district centres, teachers receive their wages from the school district centre. Salaries are determined according to a nationally uniform wage chart – the act on the new career path of teachers entered into force in July 2023 (Act LII of 2023 on Teachers' New Career Paths 2023. évi LII. törvény a pedagógusok új életpályájáról), the provisions of which on wages come into force on 1 January 2024.

The annual budget act earmarks budgets to the school district centres and the Klebelsberg Centre (KK).

Each school district centre is an independent budgetary unit, and based on its legal personality, can make its own decisions concerning its own budgets, which facilitates a more effective decision-making mechanism appropriate to the local conditions, and results in the decentralisation of the maintenance system that ensures the performance of the state's public education duty.

The KK – in contrast to the former KLIK – performs neither maintenance nor operational tasks. As a central maintenance body, it ensures the professional and strategic coordination of the maintenance activities of school district centres; considering the independence of the school district centres, it coordinates and supports the operation of the school district centres, playing an important role in ensuring similar conditions and creating a stable, unified system.

With the reorganisation, the maintenance system became more efficient, decisions are now made locally, taking local needs into account. The school district centres, and the KK strive for constructive cooperation with the heads of the institutions, counting on their experience to achieve their common goal. The school district centres are in contact with the institutions, they are familiar with their educational environment, local characteristics, results, and challenges, and they support their operation. In the new system, the heads of institutions are given greater decision-making powers.

By putting operation and maintenance in the same hands, the state assumes full responsibility for public education institutions. The most important goal of the state maintenance of institutions is to ensure that the infrastructural background necessary for quality education, qualified human resources (a supply of well trained teachers) and sufficient budgetary resources for operation are ensured in schools nationwide.

Concerning the funding system of institutions managed by the Ministry of Culture and Innovation (hereinafter: KIM Kulturális és Innovációs Minisztérium; KIM) (previously the Ministry for National Economy and the Ministry for Innovation and Technology), it can be stated that VET centres are autonomous in respect of the VET institutions. The effort to reduce the disparities in the quality of operation is indicated by the introduction of the chancellery system in the VET centres following the model operating in higher education institutions, as specified in Act CIV of 2018 on the amendment of certain acts related to research and development and to vocational education and training (2018. évi CIV. törvény egyes kutatás-fejlesztéssel, valamint szakképzéssel összefüggő törvények módosításáról). According to this, the number one responsible manager of the VET centre will continue to be the director general, but there is a new stakeholder (the chancellor), who is responsible for, inter alia, the economic, financial, employment, and legal activities, as well as the financing of the institution. The chancellor is not a director of finance with enhanced powers, but a top senior manager responsible for the operation of the institution. At the VET centres, the new, management-like leadership aims to ensure that education meets the needs of the businesses operating in the vicinity of the institutions.

A VET institution operating as part of a VET centre is an organisational unit of the VET centre with legal personality, which does not have an independent budget. The budget of the VET institution operating as part of the VET centre is included in the budget of the VET centre. The facilities necessary and suitable for a VET institution operating as a part of a VET centre for the performance of its basic VET task are provided by the VET centre.

Adult training has also been within the competence of the Ministry of Culture and Innovation since the end of 2022 (formerly, the Ministry of Technology and Industry (2022), and before that, the Ministry of Innovation and Technology (2018-2022) and the Ministry of National Economy (until 2018)). However, because of the above-mentioned “new training approach”, if an adult is enrolled in basic professional training or free school-based vocational training according to Section 3 of the VET Act, the conditions detailed for VET apply, regardless of age. 

In the case of “traditional” adult training, trainers compete in the free market and determine the prices and training they offer themselves. In contrast to the per-training accreditation before 2020, after the education and training system reform, trainers have a one-off notification and/or authorisation obligation, depending on the type of training. There is no central financing option available for adult training institutions.

Fees

Under Sections 88 and 89 of the National Public Education Act (2011. évi CXC. törvény a nemzeti köznevelésről), the funding required for the operation of the public education system is provided by the state budget and the maintenance entity, which can be supplemented by the fees for services used by children and students and other own revenue of the public education institution. From the pupils' perspective, kindergarten care and public education are free for all. However, the Hungarian education system also works with the concepts of tuition fees and reimbursement fees. Tuition fees are typically paid in art education institutions and for education not related to the pedagogical programme of the given educational institution, and in the case of VET, for learning a third vocation. Thus, the state continues to provide the opportunity to acquire a vocational qualification within the framework of vocational education in a VET institution free of charge.  

Based on Act LXXXIII of 2021 amending certain acts related to vocational training and adult education (2021. évi LXXXIII. törvény az Egyes törvényeknek a szakképzéssel és a felnőttképzéssel összefüggő módosításáról ) published on 24 June 2021, the category of persons eligible for participation in VET free of charge has been expanded: Until the age of 25, the possibility for persons in disadvantaged situation, persons with special educational needs (SEN) or persons with disabilities to acquire a vocation is unlimited, i.e. they can acquire any number of vocational qualifications. The amendment sets out that for the purposes of free participation in VET, vocational occupations (2) and professional qualifications (1) acquired after the entry into force of the Act (1 September 2021) shall be taken into account – which means that previously acquired qualifications are not affected. 

According to the currently effective regulations, the state provides, free of charge:

  • the acquisition of the first two vocations – including participation in the related preparatory year and workshop school – until the completion of the first professional exam; in the case of the second profession, for a maximum of three academic years;

  • the acquisition of the first professional qualification related to professional training until the completion of the first qualification exam;

  • the acquisition of a high-school diploma based on student status in a technicum or under an adult training contract,

in the VET institution managed by it or by the maintenance entity with a cooperation agreement. Free of charge remedial and supplementary examination also applies to the first remedial and supplementary examination following the termination of student status or adult training contract. For the purposes of free participation in VET, preparation for a profession that includes the existing partial vocation and taking a professional exam to perform the job at a higher standard does not count as obtaining an independent profession.

In all cases, participation in VET under student status in a VET institution managed by the state or by a maintenance entity with a cooperation agreement is free of charge for persons with a cumulative disadvantage and persons with special educational needs or disabilities.

The state VET institution and the non-state VET institution managed by a maintenance entity with a cooperation agreement provide, free of charge, to those who are entitled to free participation in VET: the activity directly related to vocational education and vocational training; the acquisition and processing of educational materials related to the programme outcomes standards and requirements; everyday physical education; the classification exam; the differential exam; as well as the remedial and supplementary exams related to these, and the repetition of the same grade, with the exception specified in the decree. Moreover, it also provides, free of charge, for students in compulsory schooling age, supervision during the opening hours of the VET institution and the period of legal stay, as well as during meals; health promotion and mandatory regular health supervision; participation in other activities, study trips or other professional programmes outside the VET institution organised by the VET institution in connection with vocational education; activities not directly related to vocational education; and catch-up and developmental pedagogical care; professional materials used by the student in the course of education and training, the work clothes and protective equipment necessary for this; participation under a guest student status for the acquisition of general knowledge or established due to long-term medical treatment (these were enacted by Government Decree No 380/2021 (VI.30.) amending certain Government Decrees relating to vocational training and education (380/2021. (VI.30.) Korm. rendelet az Egyes kormányrendeleteknek a szakképzéssel összefüggő módosításáról).

Reimbursement fees or tuition fees can only be collected from students or training participants who participate in VET free of charge in the cases specified in the Government Decree.

The following services can be provided in exchange for a reimbursement fee: other activities not specified in Section 2 of the VET Decree; repeated participation in activities affected by non-fulfilment of the study requirements in an adult training contract; the graduation exam after the acquisition of the graduation certificate or termination of student status or adult training contract; and for a certain exam subject, the second or additional remedial and supplementary exam of a failed graduation exam before obtaining the graduation certificate during the existence of student status or adult training contract. 

A state VET institution and a non-state VET institution managed by a maintenance entity with a cooperation agreement provide the following in exchange for a tuition fee:

a) training in the VET institution not related to vocational education and other related services,

b) repeating the grade for the third and subsequent times due to failure to meet the study requirements. 

VET institutions and dual training sites must not charge reimbursement fees or tuition fees for the part of specialised education that takes place as part of a VET employment contract.

The state provides support for the provision of the basic tasks of VET institutions. The costs of the specialised education organised in the VET institution are covered by the central budget and the maintenance entity. The costs of specialised education organised by the dual training site are covered by the dual training site providing the specialised education and the training, as defined in the regulations.

Low-income families and families with at least three children – based on Act XXXI of 1997 on the protection of children and guardianship administration (1997. évi XXXI. törvény a gyermekek védelméről és a gyámügyi igazgatásról), and Government Decree 328/2011 (328/2011. (XII.29.) Korm. rendelet a személyes gondoskodást nyújtó gyermekjóléti alapellátások és gyermekvédelmi szakellátások térítési díjáról és az igénylésükhöz felhasználható bizonyítékokról) – receive a 100% discount on the school meals in kindergartens and 50% in schools.

In the case of non-state-maintained institutions, those that sign a public education contract with the state must not charge tuition fees. In the case of schools that do not enter into such a contract, the maintenance entity determines both the amount of the tuition fee and the rules for the discounts that may be granted.

In the case of a non-state-managed VET school, the condition for benefiting from the budget contribution is that the maintenance entity must enter into a cooperation contract with the responsible ministry.

Financial support for the children's families

In Hungary, the state system of financial support for families is regulated by the Family Support Act (1998. évi LXXXIV. törvény a családok támogatásáról). The state provides monthly schooling support for the child's education and schooling costs. This support is a subjective right of the parent raising the child until the end of the child's compulsory school age, or until the end of secondary school education, but no later than the end of the year in which the student turns 20. From the beginning of the 2010/11 academic year, there is a provision that suspends the payment of schooling support if the child misses 50 classes without justification. Another form of benefit is childcare support, to which, a subjective right, a parent raising three or more minor children is entitled. The support is paid starting from when the youngest child turns 3 until the child turns 8.

The child has the right to receive free or discounted school meals at the kindergarten, depending on the family's financial situation, in cases defined by law. School meals must be provided free of charge for children participating in kindergarten education if:

  • the child receives a regular child protection benefit;

  • the child is chronically ill or disabled, or lives in a family in which a chronically ill or disabled child is raised;

  • the child lives in a family in which three or more children are raised;

  • the child lives in a family in which, based on the parent's declaration, the amount of monthly income per person does not exceed 130% of the mandatory minimum wage reduced by personal income tax, employee health insurance and pension contributions (HUF 139,184 in 2021);

  • the child is in foster care.

For everyone with dietary needs certified by a specialist doctor, dietary meals suitable for their condition must be provided in the educational institution. If the children's meals are provided by the local municipality, the school meal reimbursement fee is established by the local municipality.

Under the Act on Public Education (2011. évi CXC. törvény a nemzeti köznevelésről), starting in 2013, the state made textbooks free of charge for primary school students in an phasing-in system. In the 2020/21 academic year, textbooks were given free of charge to all students in grades 1-9, regardless of the maintainer, and to all children in need in the grades above.

If the pupil is enrolled in a VET institution, he or she is entitled to the statutory benefits (e.g. a scholarship or wage under a VET employment contract, a one-off career start allowance, student ID card, dormitory placement, awards). Students are entitled to a scholarship – except for students participating in specialised education under a VET employment contract – in connection with the acquisition of the first vocational qualification in the vocational education in which he or she participates free of charge. Scholarships are awarded to students participating in basic education in all sectors and specialised education at the VET institution, as well as in some preparatory years and in workshop schools. Among the benefits, students are entitled to the one-off career start allowance if he or she completes the training and acquires a vocational qualification. The amount and conditions of the scholarship, one-off career start allowance and support are dependent on results; this can encourage the students to take their studies in VET seriously, efficiently and effectively. Young people acquiring their first vocational qualification are entitled to the one-off career start allowance after completing their studies, to promote sole entrepreneurship. 

The basis of the scholarship, one-off career start allowance and support was the amount of the mandatory minimum wage valid on the first day of the academic year. Government Decree 800/2021 (XII. 28.) on the amendment of certain government decrees relating to vocational education and training (800/2021. (XII. 28.) Korm. rendelet egyes kormányrendeleteknek a szakképzéssel összefüggő módosításáról) introduced new regulations regarding the basis of scholarship, one-off career start allowance and support: this is the one-month amount of the direct cost of specialised education defined in the Central Budget Act. The rules for these student benefits established by Government Decree 800/2021 (XII.28.) must be applied from the academic year starting on 1 September 2022.

These financial incentives are aimed at creating a VET system that provides existential safety for families and students during their studies, compensates for social disadvantages, and provides attractive career opportunities within the framework of VET.

Financial support for students in disadvantaged situation

In addition to the state, municipalities may establish an entitlement to regular child protection benefits on a social basis. This primarily applies to children from extremely low-income families and/or with serious illness. The form of benefit (cash or in-kind) is decided upon by the municipality in which the applicant reside.

Regarding schoolmeals, support can be applied for based on a set of social criteria. Eligible persons include students participating in full-time education who receive regular child protection benefit, those living in families with three or more children, and chronically ill or disabled students.

Participation in VET with a student status in a VET institution managed by the state or by a maintenance entity with a cooperation agreement is free of charge for persons with a multiple disadvantages and for persons with special educational needs or disability.

The student can apply for support on the ground of his or her social needs and good academic performance for participating in free of charge vocational education.

On the grounds of social needs and academic results, students can apply for support, if they
a) participate in vocational education free of charge,
b) are considered disadvantaged at the time the application is submitted or in the five years prior, or are entitled to regular child protection benefits, and
c) have average grades above 3.50 at the end the academic year preceding the submission of the application.

The monthly amount of the support, if the student has an end-of-year qualification that can be considered in respect of the previous academic year under his or her status as a student in VET, is the following percentage of the support base:

  • 16%, if the average of the grades obtained at the end the academic year preceding the submission of the application is between 3.50 and 3.99;

  • 25%, if the average of the grades obtained at the end the academic year preceding the submission of the application is between 4.00–4.49;

  • 34%, if the average of the grades obtained at the end the academic year preceding the submission of the application is above 4.49.

If the student does not have end-of-year grades that can be taken into account in respect of the previous academic year, the student is entitled to the amount of support specified in the VET Decree (12/2020. (II.7.) Korm. rendelet a szakképzési törvény végrehajtásáról) (8 or 16% of the scholarship base). 

If the student receives support under the Apáczai scholarship programme, in the ninth and tenth grades of technicum he or she is eligible for support in addition to the support, the monthly rate of which is eight percent of the support base (Enacted by:  Government Decree 292/2023 (VII.6) on the amendments to government decrees due to the ex-post impact assessment of the transformation in vocational education and training (292/2023. (VII. 6.) Kormányrendelet a szakképzésben lezajlott átalakítás utólagos hatásvizsgálatából adódó kormányrendelet-módosításokról), Section 24 (2))

The call for applications is published by the National Office of Vocational and Adult Training (NSZFH) on the website operated as part of the VET information centre. The award decision is made by NSZFH. The support is provided by the NSZFH based on a support document. The student is eligible for support for the given vocational occupation for the duration of the VET programme specified in the Register of Vocational Qualifications if he or she meets the specified criteria.

Financial support for pupils

The state provides students with a student ID card, with which they can use for travel, cultural and other discounts, and can prove their entitlement to benefits and reimbursements requiring a student status. IDs are provided by their schools. Pupils travel to school for free if they are of compulsory school age and the school providing their compulsory admission is in another town. In this case, the municipality where they reside provides free transport. Eligibility is confirmed by the public notary of the municipality. 

Among the various sub-programmes of the Útravaló (Pathfinder) Scholarship Programme, the sub-program “Út a középiskolába” (Road to Secondary school) aims to prepare disadvantaged students, including Roma students, for secondary schools that award a secondary-school leaving examination certificate; the “Út az érettségihez” (Road to the secondary school leaving exam) sub-programme helps students to successfully complete secondary school; the “Út a szakmához” (Road to a Vocational Qualification) sub-programme helps to overcome the learning difficulties of vocational school students.

In Hungary, under the VET Act, a universal VET scholarship was introduced, phased-in from the 2020/21 academic year. Students are eligible for this scholarship – except for students participating in specialised education under a VET employment contract – for the free of charge acquisition of the first vocational qualification. The scholarship is financed from the basic training subsection of the National Employment Fund. Under the VET Decree, the National Office of Vocational Education and Training and Adult Learning is obliged to transfer the payment of scholarships. For disbursement, all students must have a bank account, whose data are also recorded in the KRÉTA system, through which the payment is made. Eligibility for scholarships is also shown in the KRÉTA system. 

Eligibility for the scholarship and support must be established on the 15th of each month, based on the registration and study framework system, and must be transferred by the 28th of each month, with the provision that scholarship and support for the first two months of the semester are transferred in one amount in the second month, while the scholarship and support for July and August is transferred at the same time as the scholarship and support for June.

 According to the currently effective regulations, the monthly amount of the scholarship is

  • 8% of the scholarship base in the sectoral basic education in technicums; 16% of the scholarship base in the sectoral basic education in vocational schools,

  • the following percentage of the scholarship base for specialised education in a VET institution

    • 8%, if the average of the grades obtained in the end-of-year school report of the previous academic year is between 2.00–2.99,

    • 25%, if the average of the grades obtained in the end-of-year school report of the previous academic year is between 3.00–3.99,

    • 42%, if the average of the grades obtained in the end-of-year school report of the previous academic year is between 4.00–4.49;

    • 59%, if the average of the grades obtained in the end-of-year school report of the previous academic year is above 4.49.

  • The monthly amount of the scholarship is 16% of the scholarship base if the student does not have an end-of-year school report for the previous academic year resulting from his/her student status in VET.

According to the legislative amendments of 2023, students in workshop schools are entitled to the scholarship of vocational school students in the sectoral basic education.

Before the amendments, the monthly amount of the scholarship for the preparatory year was 8 percent of the scholarship base.  Based on the 2023 legislative amendments::

  • for language preparation in technicum and orientation development in vocational school: 8 percent of the scholarship base;

  •  for the “Dobbantó” (springboard) programme in a vocational school: 16 percent of the scholarship base.

Eligibility for scholarship lasts until the last school day of the academic year specified in the ministerial decree regulating the school calendar in vocational education, in which the student begins the first professional exam immediately following the specialised education. Students do not receive a scholarship in any repeated year if they were obliged to resit the year. Students do not receive a scholarship for the remainder of the given academic year if their unexcused absences reach six sessions or the student's VET employment contract is terminated with immediate effect by the dual training site, unless the court restores the employment contract at the student's request. This must also be applied to students in the preparatory year and in workshop schools.

If students in specialised education participate in dual training under a VET employment contract they receive a wage instead of a scholarship. Until 31 December 2021, in line with the VET Decree, the amount of the monthly wage in the year of the signing of the employment contract was at least 60% of the mandatory minimum wage applicable on the first day of the year. For students with good academic results, this amount could reach the applicable minimum wage. From 1 January 2022, it has no longer been calculated on the basis of the minimum wage, but on the monthly amount of direct cost defined in the Act on the Annual National Budget: the amount of the monthly rate of wages paid on the basis of the VET employment contract – as agreed by the student and the dual training site – is the monthly amount of the direct cost of specialised training specified in the central budget act, but no more than 168 percent of it, which must be determined taking into account the student's professional knowledge and academic results. Students are entitled to only one type of benefit at a time: either to a scholarship or to a salary.

Salary and benefits are payable to the student (training participant) for a full month from the date of entry into force of the VET employment contract. If the VET employment contract is established or terminated during the first month after the start of the academic year, the student (training participant) is eligible to the time-proportional part of the salary and benefits.

For students (training participants) who have a VET employment contract, the company can claim a significant tax relief. The employer can write off the cost of the student's net salary or a large part of it in the form of a tax relief, the amount of which depends on the applied multipliers (vocational multiplier, grade multiplier) and the number of working days spent at the dual training site.

One of the most significant novelties of the new VET act is that the student is considered as an employee at the dual training site, thus the employer can have higher expectations than under the previous apprenticeship contracts. Of course, a 10th-grade student is less capable of participating in value creation at the dual training site, while an 11th-grade student, based on his or her knowledge and experience, can perform more activities that benefit the dual training site. This difference is compensated by the grade multiplier introduced, which affects the amount of tax relief that can be claimed.

As a new element, the VET Act also introduced the one-off career start allowance, for which students are eligible if they complete the training and pass the professional exam. 

Its rate from 1 January 2022, under Government Decree 800/2021 (XII.28.), is as follows: The one-off career start allowance is the following percentage of the base of the one-off career start allowance 

a) 133%, if the result of the professional exam is between 2.00 and 2.99,

b) 184%, if the result of the professional exam is between 3.00 and 3.99,

c) 243%, if the result of the professional exam is between 4.00 and 4.49,

d) 302%, if the professional exam result is above 4.49.

The one-off career start allowance must be transferred within 60 days of the last day of the professional exam period after obtaining the vocational occupation qualification.

As an element of support for VET, students are eligible for a contribution to the fee of a state-recognised language exam obtained in one of the official languages of the European Union or a non-EU state neighbouring Hungary, as well as in Chinese, Arabic and Russian. The amount of contribution that can be paid on these grounds per student and per language exam cannot exceed 34 percent of the one-month amount of the own contribution to specialised education as defined in the Act on the Annual National Budget. Students are not eligible for the contribution if, as specified by the law, they are otherwise eligible for support for the payment of the language exam fee. 

From 1 January 2022, the training loan can also be used in VET in connection with student status or adult training status established for vocational education or vocational training. The condition for this is that the vocational education and vocational training should last more than three months.

In the context of adult training, those interested in training can be supported by interest-free training loans, the option of a scholarship arranged in a contract between the trainer and the training participant, and the possibility of “taking over” the partial or full training fee, available with varying support intensity in the various support schemes. In 2023, efforts are made to explore additional support opportunities for Hungarians, either through the individual study accounts or the system of micro-credentials. These schemes are planned to be available within 1-2 years.

Private, ecclesial and ethnic minority institutions

The current regulation is based on the National Public Education Act (2011. évi CXC. törvény a nemzeti köznevelésről), which defines the framework within which non-state, non-municipal public education institutions can be established and operated. Within this category, the National Public Education Act differentiates between public education institutions managed by ethnic minority self-governments, ecclesiastical legal entities, religious associations or persons, or organisations. If the public education institution is not founded by the state or local municipality, including an association of local municipalities, a license is required to start operation.

The central budget allocates a contribution to the performance of the public education tasks of the institution managed by a non-state body, the condition of which is that the institution must carry out its activities in accordance with the provisions of the operating licence.

The state guarantees the support of churches with legal personality and public education institutions managed by ethnic minority self-governments and regulates the state contribution to the activities of public education institutions of other private maintenance entities in the Act on the National Annual Budget. Details of the state support for operation and of the financing are included in the annual budget act.

Under the National Public Education Act, the minister responsible for education can enter into a public education contract with the maintenance entity of a non-state public education institution. The content, validity period and rules for signing the public education contract are regulated by the Government Decree on the implementation of the Public Education Act (229/2012. (VIII. 28.) Korm. rendelet A nemzeti köznevelésről szóló törvény végrehajtásáról).

In the case of a non-state-maintained vocational secondary schools and vocational schools, the condition for receiving the budget contribution was that the maintenance entity had to enter into a VET contract with the responsible minister.

The 2023 Budget Act (2022. évi XXV. törvény Magyarország 2023. évi központi költségvetéséről) provides uniform, average wage-based support to all non-state maintained schools – according to the same principle as for municipality kindergartens –; additionally, it contributes to operating expenses proportional to the number of students for the schools of ethnic minority self-governments and larger churches. All schools are covered by support for school meals and textbooks (for the discounted or free provision of these to eligible children and students). Furthermore, a few larger churches receive additional support for teaching religious studies and ethics and related textbooks.

National Minority Study Scholarship

The purpose of the scholarship is to promote higher education of secondary school students with outstanding abilities who belong to one of the nationalities listed in the Nationalities Act and live in disadvantaged social conditions. Students with Hungarian citizenship can apply if, according to their declaration, they belong to a national minority, their academic results at the end of the academic year preceding the submission of the application reach an average score of at least 4.00, calculated according to the National Minority Scholarship Decree, and receive no other scholarship from other sources for the same period.

The amount of the scholarship is HUF 30,000 per student per month, for which, if the application is successful, the student is eligible in the two academic years after 1 September following the award of the scholarship. 

Roma Minority Study Scholarship

The purpose of the scholarship programme is to provide support to highly capable Roma secondary school students, based on the recommendation of secondary schools that provide schooling and education for the Roma, to facilitate their higher education. Secondary education institutions and their students are jointly eligible to apply. Students with Hungarian citizenship can apply if, according to their declaration, they belong to the Roma minority, their academic results at the end of the academic year preceding the submission of the application reach an average score of at least 4.00 calculated according to the Roma National Minority Scholarship Decree, and receive no other scholarship from other sources for the same period.

The amount of the scholarship is HUF 30,000 per student per month, for which, if the application is successful, the student is eligible in the two academic years after 1 September following the award of the scholarship.