National Employment Fund

Unemployment benefit (álláskeresési járadék) — passive income replacement for job-seekers. Hungary's benefit duration is capped at 90 days, significantly shorter than OECD norms and arguably too short to enable productive job search for skilled workers. The FSI applies a nominal freeze rather than a cut: the short duration already creates strong return-to-work incentives; extending the freeze preserves fiscal discipline without exacerbating the incentive structure. The preferred reform is extending the maximum duration to 180 days for workers with long contribution records, offset by stricter conditionality and regular activation contact.

The Start-munkaprogram employs approximately 150,000 people at 161,400 Ft gross per month — below private-sector minimum wage. IZA research shows exit rates to regular employment of 10–40%; 51% of programme organisers did not believe participants would find regular work. At 156,000 mFt this is expensive employment that does not generate employment. The 5-year phase-out transitions resources to individual activation vouchers redeemable at accredited private-sector employers. This costs each SZJA payer roughly 34,667 Ft per year.

EU pre-financing and co-financing for labour-market and social inclusion programmes from the cohesion funds — a revolving cash-flow bridge for EU-funded projects where Hungary advances costs ahead of EU reimbursement. The FSI keeps this line: it is the mechanism by which Hungary draws down EU cohesion funding for skills and employment projects. The FSI's reform objective is ensuring that EU-funded programmes avoid the same design flaws as the Start-munkaprogram — measurable employment outcomes required for continued funding.

Vocational training transfers — the state funding training programmes for unemployed and at-risk workers. The levy that historically funded this (Szakképzési hozzájárulás) was abolished in 2022; the Fund now finances training from contribution revenues. The knowledge-problem objection is that central bodies cannot identify which vocational skills the labour market will demand 18–24 months later, when trainees complete programmes. The 5-year phase-out transitions to individual training accounts (Slovak/Austrian model) where workers choose accredited providers, creating demand-side pressure on curriculum relevance.

Active employment subsidies — wage subsidies, hiring incentives, and activation payments designed to move unemployed workers into employment. The public-choice literature on active labour-market programmes is mixed: targeted subsidies for genuinely hard-to-place workers can correct information asymmetries between employers and candidates, but broad-based hiring subsidies largely subsidise hires that would have occurred anyway. The 5-year phase-out transitions subsidies to individually-assessed, means-tested activation grants with mandatory case-management — the Slovak 2004 activation reform is the model.

Wage guarantee payments — the Bérgarancia Alap advancing wages to employees of insolvent employers, then recovering from the insolvency estate. This is a core contract-enforcement function in the classical-liberal sense: employees hold unsecured wage claims against a failing employer; the guarantee fund ensures this claim is paid without employees becoming unsecured creditors in a slow insolvency process. The FSI keeps this line. Capped at five times average gross monthly wage per employee, it is well-designed against moral hazard. The relevant reform is insolvency-process efficiency, not the guarantee fund.

Operational expenditure of the National Employment Fund's administrative structure — the public employment service (NFSZ) and its local offices. A nominal freeze is appropriate: the employment service performs a legitimate matching function between job-seekers and vacancies, and its information-aggregation role has genuine public-good characteristics that private job boards may not replicate for low-skill or rural workers. The preferred reform is digitising case management (Estonia model) to reduce per-case cost without reducing geographical reach.