From the school year 2020/21 new financial incentive mechanisms are in place to boost the attractiveness of VET and raise the prestige of IVET institutions.
The incentives launched by the new VET Act (into force in 2020) aim to achieve a VET system which ensures financial security for IVET learners during their studies, offsets social disadvantages, and provides attractive career opportunities.
The general scholarship in IVET
Every learner in an IVET institution receives a general scholarship as an enabler for completing the programme to acquire a first vocational qualification listed in the national register of basic occupations. The monthly amount of scholarship is calculated based on the minimum wage (EUR 457 per month in 2021), using different multipliers:
- 5% during sectoral foundation studies (grades 9-10) in Technicums (EUR 22);
- 10% during sectoral foundation studies (grade 9) in VET schools (EUR 44);
- 5% to 35% (based on learner performance) during specialised vocational studies (grades 11-13 in Technicums, grades 10-11 in VET schools) delivered in school workshops; or,
- at least 60% of the minimum wage (EUR 263 in 2021) with a vocational employment contract with an employer (dual training);
- 5% in the orientation year programme available after completion of lower secondary (preparatory programme to develop competences for those who are unsure about their career choice);
- 5% in the school workshop programme (bridging courses to obtain a partial qualification after lower secondary for those who would drop out and leave VET without qualifications).
Learners are ineligible for VET scholarship if they are repeating a grade or if they reach six unexcused absences in a year. In the first semester of 2020/21, more than 67 000 learners – all those in their first year of VET studies – were eligible for the scholarship; they had to open a bank account as monthly scholarships are paid via bank transfer.
Support for vulnerable groups and entrepreneurship
From the school year 2021/22, disadvantaged learners who show good academic results can apply for the Apáczai scholarship, aiming to promote talent development and reduce inequalities. The monthly amount of the Apáczai scholarship is 20% of the minimum monthly wage (EUR 91 in 2021/22).
Moreover, young people studying to acquire their first vocational qualification listed in the national register of vocational occupations are entitled to a lump sum allowance after completing their studies, to promote entrepreneurship. The amount of the grant depends on academic performance (80-180% of minimum wage).
From the school year 2020/21, companies participating in dual training must sign a VET employment contract with learners, which means higher benefits for VET learners. The main difference from earlier apprenticeship contracts is that, apart from practical training, theoretical vocational subjects can also be taught in the workplace as part of the new VET employment contract, and its duration counts for seniority. The amount of the monthly wage (which replaces the VET scholarship) must reach at least 60% of the minimum wage (EUR 263 in 2021).
Incentives for companies
Dual training can take place at either private companies or sectoral training centres (non-profit economic organisations established by several SMEs; a VET centre can also be a member of a sectoral training centre). Due to the increased benefits for VET learners engaged in dual training, further tax reduction is granted for dual training partners, which can be calculated using an online calculator available on the website of the Hungarian Chamber of Commerce and Industry (the amount of the tax reduction depends on the sectoral classification of the vocational occupation and on the grade in which the student is enrolled). Apart from that, dual partners can claim additional reimbursement if VET learners successfully pass the final vocational exam.
The recently introduced incentives in IVET aim to reach out to more young people who would potentially choose VET, and to reduce early school leaving. The preliminary enrolment data for the school year 2021/22 conclude that the percentage of upper secondary learners choosing VET has increased by 10% to 15%, partly due to the introduction of the general vocational scholarship, which emphasises the importance of financial incentives in VET.