Poor families hard hit by Hungary’s “new and improved” welfare system

April 22, 2015

MM_20150408_008-740x400Hungary’s new welfare system has in been in place for one month. There are those who stopped receiving support, and there are those who have been told not to request support because there won’t be any money to support them anyway.

Hungary’s national government transferred responsibility of providing certain types of welfare to local governments.  But that means local governments must direct funds away from other projects in order to make these payments. Some local government notaries are saying the municipalities won’t have funds for local development projects.

“Don’t bother asking, we don’t have money for that”

This is the news circulating around the gypsy slums in Bag, Hungary, ever since the new welfare system was ushered in a month ago. In March the national government stopped providing several forms of welfare and instead assigned the responsibility to the local governments.

In February it was clear that local governments would have to tighten their belts, but that didn’t stop state secretary for social affairs Károly Czibere from saying there’s no excuse for not having enough money to pay because the national government is providing funds to even the poorest of local governments. Regardless, it’s clear that those dependent on welfare are worse off than before. In many cases its the loss of housing subsidies that’s hurting them the most.

A family of eight on HUF 183,000 (USD 658) a month

István and Kati live in a household of eight in Bag’s Ősz Street, a part of the village that is only slightly better than the worst section of the village in Tél Street. There are no paved roads, but there is electricity and water. Unfortunately, the house István and Kati live in is not connected to sanitary sewer. Both are public works employees. Kati works in the village cultural center. István, or Buksi as he is known to everyone in the village, is a street cleaner. The income earned by István and Kati together with their family welfare is all they have to take care of their five children and one grandchild. They say they have never asked the local government for financial support with the exception of the monthly HUF 6,500 (USD 23) for housing, funds they use to help pay for utilities.

Their home has prepaid electricity service, meaning they must insert a prepaid card into their electric box to be able to use electricity. The put about HUF 20,000 (USD 79) on the card every month. Half of that goes toward paying off their accrued electricity debts.  The other half covers their electric needs for the month. The HUF 6,500 they received from the local government helped them pay for electricity.

Kati says that from September only those families who need more than HUF 10 000 in support will get it because that is all the local government can afford. She says that people in mayor’s office told her not to bother asking for the support because there won’t be money.

The HUF 6,500 really helped the family. Kati receives HUF 75,000 (USD 270) in welfare to help her look after the children, her husband makes HUF 60,000 (USD 215) as a public works employee, and the couple receives an additional HUF 48,000 (USD 173) in welfare for the family. In total, Kati and István receive about HUF 183,000 (USD 658) with which to support a family of eight, about HUF 23,000 per person per month. That is with the monthly expenses of paying for electricity (HUF 20,000), arrears to the bank (about HUF 40 000), public transportation and soccer club fees (HUF 10,000), and the twice a month trip to the Penny market to shop for groceries (about HUF 100,000).

Léna is in a similar situation. She had received HUF 5,400 in housing support but the local government recently told her that she will no longer be receiving this money. “I make HUF 62,000 as a public works employee and receive about HUF 26,000 in welfare for the family. The (local government’s) housing support was just enough to help cover our water bill,” she says. She also works at the local civil organization BAGázs. Léna says she generates minimal income from working at BAGázs, but that is not why she works there. “We always had the desire to do something, to achieve something, and that is why we were very happy when BAGázs was created,” she says. The organization was created to help involve locals in the process of strengthening their sense of personal responsibility by creating a model of Roma integration.

Municipal governments given two weeks to prepare

“We have to draw funds from elsewhere if we want to continue operating at this level,” said Bag’s municipal notary Mrs. József Bognár, who thinks the changes to the welfare system were unexpected. At the end of February Károly Czibere appeared on Hungarian television and said that those municipalities that have  not prepared for the changes “have their own irresponsibility to thank” because the national government informed all municipalities of the coming changes back in December. Mrs. Bognár doesn’t remember it happening that way.

“The national government informed us that things would change around the end of January or early February. We had two weeks to prepare and start working out the details.  We would have needed at least a month to prepare.”

“Long ago the municipalities were notified at least one or two months in advance (before a law was passed that would affect local governments).  Now we hardly hear anything,” she said.

Bag spent about HUF 6 million on housing support for locals last year. This support reached about 80 people. The housing support made up about of all welfare paid out by the local government, but there were those in the village, albeit fewer people, who received support for medical care and medication. For such families, an unexpected medication expense was impossible to cover. These same people are left wondering whether they will receive care in the future.

Bag qualifies for additional support from the national government, but that won’t solve its problems.

“Last year we only received funding for approved types of welfare, but we are continuously receiving more requests for welfare. Everything we are paying out this year is coming from our own budget,” said Mrs. Bognár.

Sociologist Bálint Misetics recently said that the government’s planned HUF 30 billion budget for welfare won’t be enough. The government has already pulled HUF 35-38 billion out of the welfare system, a system that was underfunded to begin with.

Mrs. Bognár says the local government is trying to resolve the situation by redirecting funds from elsewhere, but they will only know from where in the middle of the year. “We’re trying to save energy in the mayor’s office and at the schools, but we’ve already received help from people in the local community too. Someone spent HUF 1 million of their own money to buy toys for the preschool and that also helped save money”.

The national government claimed the reason why the welfare system needed to be changed was so that it would be more transparent because the support wasn’t always getting to the people who needed it.  Mrs. Bognár disagrees with the government’s assessment.

“It is the responsibility of local governments to help those in need. I’m sure there are those who have abused this. But in 99 out of 100 cases the money is going where it is needed,” she said.

“People have gotten used to the form of support they have been receiving. But now everything’s been renamed and the local governments have to pay for it. This will certainly result in less local development because we won’t have money to pay for it and it is difficult to ask for loans because we can only do that with approval from the national government.”