Let's look at the criteria to be used to assess eligibility for family allowances for children after graduation. For employees with children who have graduated from secondary school, it is important to know that the end of the school year is also the end of the school year for their children.
With the end of the student status, the child ceases to be a dependent beneficiary of the family allowance, which means that the advance tax return previously submitted by the parents needs to be amended.
To understand and know how to amend the declaration, we need to look at the family allowance entitlement.
The family allowance is paid for children who are entitled to a family allowance (legally family allowance = school education allowance).
It is important to emphasise that it is the entitlement to family allowances that should be examined, not the actual parent to whom the family allowance is paid.
So, if you have a school-age child, you will be entitled to a family allowance in the following cases:
- With regard to children of compulsory school age: in Hungary, compulsory school age is defined as the until the end of the school year in which the student is sixteen years of age fulfilled. The compulsory education of pupils with special educational needs may be extended until the end of the school year in which they reach the age of 23.
- After the end of compulsory schooling, a child who is enrolled in a general education or vocational training institution (secondary school) until he or she reaches the age of twentieth (in the case of a child with special educational needs, the twenty-third) year of age last day of the school year.
The school year ends in June for a child who has graduated. Thus, from 1 July, no family allowance and no family tax credit will be paid.
Beneficiaries must declare this change to their employer by the July payroll deadline at the latest.
The amendment to the declaration to the employer is particularly important because the parent will have a tax payment difference at the end of the year due to the unjustified family allowance and may also be subject to a 12% differential penalty.
What to do step by step
July a new „modification” declaration must be submitted to the employer, indicating the child has completed secondary education and the field „Dependants” must be marked „0” (as not eligible for the benefit).
Depending on which path your child takes after finishing school, the family allowance, and thus the family tax allowance, may be available again for the next period.
Let's look at what can happen:
I. Child starts higher education from September
No family allowance or family tax allowance is paid for a child in higher education. No additional family allowance can be claimed for a child.
On the other hand, if there is a minor child in the family for whom the parent is still entitled to family allowance, the student will be counted in the number of children, increasing the amount of the monthly benefit (unless he or she has an independent income, in which case he or she will not be taken into account at all). In this case, the declaration submitted for July will need to be amended again in September.
What you owe your employer
- July a statement amending the family tax allowance for the month, on which the dependent status code of the child concerned will be „0”.
- September submit another declaration with the dependent quality code of the child in higher education as „2” (for a minor child, the beneficiary dependent is marked „1”).
In any case, this declaration should only be made from the beginning of September, even if the parent expects his/her child to continue his/her studies in July.
A child in further higher education is counted retroactively in July and August, which affects the amount of the discount.
Things to do when filing a tax return
A July and August months can be claimed back in the 2021 tax return.
The benefit can only be claimed retroactively for these months on the basis of a certificate issued by the training institution, so the earliest you can claim this benefit is in your tax return, and you cannot make a declaration to your employer for this period.
II. From September, the child continues his/her education in secondary school
Students who, after the summer break, return to full-time education in a public school (e.g. vocational training with a school-leaving certificate) are entitled to schooling allowance or family allowance until the end of the academic year in which they reach the age of 20 (or 23 in the case of children with special educational needs). In this case, the family allowance claim must be resubmitted to the employer in September. Alternatively, you will be able to claim the tax credit retroactively for the months of July and August when you submit your tax return at the end of the year.
What you owe your employer
- July a statement of family tax allowance amended for the month, on which the dependent status code of the child concerned will be „0”.
- September a new amended declaration must be completed for each month, on which the dependent status code of the child concerned will be „1” (beneficiary dependent)
What to do with the Family Support Paying Agent
From September you have to reapply for family allowance because it is not automatic. To apply, you must enclose a certificate of school attendance.
Things to do when filing a tax return
When filing your tax return, you can claim tax relief retroactively for two months in the summer for the following year until 20 May. In the draft July and August months will not automatically be shown, so the individual will need to overwrite the entitlement for those.
III. The child stops learning
If a child who has completed upper secondary school does not continue his or her education, he or she from July the parent will no longer be entitled to family allowance and family tax credit.
What you owe your employer
July a family tax allowance statement, amended for the month, on which the dependent status code of the child concerned will be „0”.
Although your child's student status ends in June, the student card issued by the secondary school is valid until 31 October. This means that the health service entitlement is considered settled for an additional 45 days from 31 October.
If you are neither a student nor insured (employed) after the 45th day, 16 December-You have to pay a health service contribution to be entitled to health care from 1 January 2010. The NAV will automatically impose the payment obligation and inform the young person accordingly.
The health service contribution can be paid by another person instead of the individual, but this requires the approval of the NAV.
More information on the health service contribution is available on the NEAK website: National Health Insurance Fund Management - Payment of health service contributions (gov.hu)
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