The Pension System in Hungary from the Austro-Hungarian Compromise to the Second World War

Abstract

Before the Second World War, there was no uniform state pension in Hungary, and for decades a large proportion of pensions were determined on the basis of Franz Joseph’s pension decree of 9 December 1866. Among state employees, certain professions were gradually subordinated to the pension law applicable to the respective area: Judges (1871), teachers (1875), soldiers (1875) and officials and servants (1885). The Civil Servants’ Pensions Act was amended in 1912.

Society and the state gradually set up a compulsory social insurance scheme, which was established between 1891 and 1928. At the turn of the 19^th and 20^th centuries, workers were first insured against illness and then against accidents. Between the two world wars, Béla Kovrig, one of the most important and best-known experts on social policy and social insurance, was responsible for the Old Age Insurance Act of 1928. It came into force on 1 January 1929 and affected one and a half million people.

In Hungary, after the Austro-Hungarian Compromise and in the period between the two world wars, a well-regulated and well-functioning pension insurance system was created which, despite its shortcomings – social insurance pensions lagged behind civil servants’ pensions and agricultural labourers had no pension entitlements – covered a growing section of society and represented significant progress in the development of the social benefits system.