Advantages of Employing Persons With Reduced Work Capacity

12 April 2017

Gönczi Marianna |

Nearly all employers have met employees or prospective employees with reduced work capacity. Employing such persons may be advantageous in many respects. In a profit-oriented environment, keeping costs at the lowest possible level is one of the most important considerations for companies. One of the potential ways of cutting costs is to employ persons with reduced work capacity, as both employers and employees are eligible for various allowances.

Allowances for employers include reduced rehabilitation and social contribution tax as well as wage subsidies awarded in tendering procedures. Allowances for employees include tax allowances and the reimbursement of travel expenses.

Pursuant to Section 23(1) of Act CXCI of 2011 (hereinafter: the Disability Act or DA), employers shall pay rehabilitation contribution to facilitate the employment rehabilitation of persons with reduced work capacity if they employ over 25 employees, however, the average statistical headcount of the disabled persons whom they employ is under 5% of the staffing level. This is referred to as the “mandatory employment rate”. This means that if the mandatory employment rate is lower than that, companies have to pay an annual HUF 1,147,500 per person in rehabilitation contribution tax in 2017 (the corresponding amount in 2016 was an annual HUF 964,500 per person). A limit on rehabilitation contribution is determined quarterly, and if, as a result, a company turns out to be liable to rehabilitation contribution tax, an advance payment must be paid quarterly during the year. An advance payment must be paid quarterly during the year in respect of the rehabilitation contribution.

In respect of compliance with the rate, any person

  • whose health status is at 60 or below on a 100-point health scale based on a complex rating procedure conducted by the rehabilitation authority (Section 2(1) of the DA);
  • whose health impairment is at least 40%;
  • whose work capacity has declined by at least 50%;
  • who, based on the relevant employment contract, receives either disability benefit or personal allowance for the blind, and works at least 4 hours a day.


            Employers are liable to a 22% social contribution tax per employee in 2017. If an employee holds a rehabilitation card, the amount payable can be reduced by 22% of the employee’s gross wage, however, in no case higher than by 22% of twice the minimum wage (in 2017: HUF 258,000). In practice, this means that employers employing persons with reduced work capacity are not liable to this tax up to twice the amount of the minimum wage per month. It should be noted that the Act expanded the scope of those eligible for a rehabilitation card with effect from 1 January 2017. Eligibility for a rehabilitation card is no longer restricted to those assessed as capable of rehabilitation. Those whose rehabilitation is not recommended or whose employability can, based on their health status, be restored through rehabilitation, but whose rehabilitation, due to other circumstances, is not recommended are also eligible.

            Employers employing workers with reduced work capacity in a number that exceeds the mandatory rate may apply for an accredited employer status. In this case, employers take on additional tasks such as the implementation of a rehabilitation programme or the employment of a consultant. In order for such companies to be reimbursed for the wage costs and other additional costs incurred in connection with the performance of these tasks, e.g. the restructuring of work stations, government subsidy up to as much as 100 % of such costs can be applied for if the conditions laid down in Government Decree No 327/2012 (XI. 16.) are met.

Any person with reduced work capacity who returns to the labour market is also likely to be eligible for benefits.

            For instance, they may reduce their personal income tax liability by tax credit granted to those with severe disabilities. Such tax credit is 5% of the minimum wage (in 2017: HUF 6,375). In order for eligibility to be established, a certificate entitling the holder to receive benefits issued by a general practitioner or a specialist doctor needs to be obtained. It is physicians who decide at their discretion whether, based on the relevant BNO code, a person is eligible for disability benefit. If a worker receives a certificate with a retroactive effect, benefits can be requested to be paid out with retroactive force as of the commencement of the disability, but for 5 years retroactively at most. Requests must be in the form of self-revision.

            Furthermore, the law stipulates that the costs incurred by commuting between work and the home be reimbursed for persons with reduced mobility or other disabilities. In addition to such persons, persons transporting them are also eligible. The reimbursed amount ranges between HUF 9/km and HUF 15/km. This means that, based on the employer's decision, either amount can be granted free of tax.

            Realising that persons with reduced work capacity are likely to need longer periods of respite, the law stipulates that employees having suffered health impairment be entitled to five working days of extra vacation time a year. Pursuant to Section 120 of Act I of 2012 on the Labour Code, persons whose health impairment is at least 50% (based on the expert opinion of the rehabilitation agency) or receive either disability benefit or personal allowance for the blind are eligible for extra vacation time. It should be noted that extra vacation time is not granted automatically. Employees must apply for it at the beginning of each year or upon their intra-year start of employment.