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FINANCING OF FURTHER PROFESSIONAL TRAINING IN HUNGARY

FINANCING OF FURTHER PROFESSIONAL TRAINING IN HUNGARY. Jakab János. TOPICS OF THIS PRESENTATION (1). PRELIMINARIES WHAT IS THE FURTHER PROFESSIONAL TRAINING? INDICATORS IN EUROPE AND HUNGARY CHANGING OF EMPLOYMENT POLICY AND THE LAW OF EMPLOYMENT TARGET GROUPS OF ADULT TRAINING

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FINANCING OF FURTHER PROFESSIONAL TRAINING IN HUNGARY

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  1. FINANCING OFFURTHER PROFESSIONAL TRAININGIN HUNGARY Jakab János

  2. TOPICS OF THIS PRESENTATION (1) • PRELIMINARIES • WHAT IS THE FURTHER PROFESSIONAL TRAINING? • INDICATORS IN EUROPE AND HUNGARY • CHANGING OF EMPLOYMENT POLICY AND THE LAW OF EMPLOYMENT • TARGET GROUPS OF ADULT TRAINING • TARGET GROUPS OF PUBLIC MONEY DISTRIBUTION IN THE FIELD OF ADULT TRAINING • THE MAIN SYSTEMS OF PUBLIC FINANCE

  3. TOPICS OF THIS PRESENTATION 2. • DIRECT AND INDIRECT STATE FINANCING SOURCES OF ADULT TRAINING • SYSTEM OF THE VOCATIONAL TRAINING CONTRIBUTION • SEGMENT OF THE EMPLOYMENT sub-fund FOR ADULT TRAINING PURPOSES • NORMATIVE SUPPORT OF ADULT TRAINING • TAX BREAK OF ADULT TRAINING • MONITORING AND CONTROLLING

  4. WHAT IS THE FURTHER PROFESSIONAL TRAINING? • HUNGARIAN SLIDES: 5 • THE INTERNATIONAL SLIDES ALTOGETHER 28.500 • Very different form: • TRADITIONAL FORM • EVENING FORM • DISTANCE FORM • …

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  8. LEGISLATIVE FRAMEWORK • Public EducationAct (1993, LXXIX) • Higher EducationAct (2005, CXXXIX) • Adult Training Act (2001, CI) • Vocational education and training Act (1993, LXXVI) • Labour Code Act (1992, XXII) • Facilitating employment and provisions to the unemployed Act (1991, IV) • Vocational training contribution and the support of the development of training Act (2003, LXXXVI) • National Qualification Register Order (1993 and 2006)

  9. ADULT TRAINING OUTSIDE THE SCHOOL SYSTEM Ministry of Social Affairs and Labour Level of central and regional management National Institute of Adult Education National Employment Service (Central Employment Officeand Employment centres) National Council of Adult Education National Council of Reconciliation Employment councils Accreditation Body for Adult Education Level of bodies Professional bodiesof NQR Level of educators Registered adult training companies 9 regional training centres Accredited adult training companies and higher educational institutions Vocational schools

  10. TARGET GROUPS OF CVET • EMPLOYED PEOPLE (3.9 MILLION – POPULATION IS 10.1 MILLION) • UNEMPLOYED PEOPLE (ACCORDING TO KSH – 255,000, ACCORDING TO THE LOW OF EMPLOYMENT – 360,000) • SHORT TERM UNEMPLOYED • LONG TERM UNEMPLOYED • INACTIVE PEOPLE (1.5 MILLION – ESTIMATED) • SHORT TERM INACTIVE PEOPLE • LONG TERM INACTIVE PEOPLE • RETIRED PEOPLE

  11. TARGET GROUPS OF THE CVET • PEOPLE WITHDIFFERENT SCHOOL QUALIFICATION(S): • WITHOUT GCSE • WITH GCSE • WITHOUT • WITH QUALIFICATION(S) • ACTIVE PEOPLE WITH WORKPLACE • INACTIVE PEOPLE • SHORT TERM • LONG TERM • RETIRED

  12. PLACES OF THE CVET • INSIDE OF SCHOOL • GCSE • SEC. VOC. SCHOOL • UNIVERSITY • POST GRADUATED • OUT SIDE OF SCHOOL • INITIAL VET • CONTINUE VET • TRAININGS – FOR BETTER EMPLOYABILITY • SUPPLEMENTARY TRAINING

  13. AIMS OF PUBLIC MONEY DISTRIBUTION AND ITS TARGET GROUPS IN ADULT TRAININGS • TARGETS: • Development; • Economic development; • Change in structure; • Development of technology; • Stimulation of investments; • Development of training • Infrastructure; • Development of curriculum; • Development of • methodology; • Development of services. • TARGET GROUPS: • Disadvantaged • Career-starter • Aged people • Handicapped • People on Child-care • supportor on child- • care allowance • Inactive • Homelessness • Etc. • Registered • unemployed, • People endangered • by reported • Expected • unemployment • according to act

  14. THE MAIN SYSTEMS OF THE PUBLIC FINANCE (PUBLIC MONEY) (ACCORDING TO ACT OF PUBLIC FINANCES) • STATE BUDGET • BUDGETS OF LOCAL GOVERNMENTS • DETACHED STATE FUNDS • SOCIAL SECURITY • + EU SOURCES

  15. NON-SCHOOL BASEDADULT TRAININGSTATE SUPPORT RESOURCES OBLIGATION OF VOCATIONAL TRAINING CONTRIBUTION Resources TAX BRAKE STATE BUDGET& MINISTRY BUDGET LABOUR MARKET FUND EMPLOYMENT sub-fund PARTICIPANT IN ADULT TRAINING Target groups UNSKILLED, DISADVANTAGED UNEMPLOYED THOSE WHO AREABOVE THE AGE OF 16 OWN EMPLOYEES 33% OF THEOBLIGATION OF VOCATIONAL TRAINING CONTRIBUTION 2003: 17.53MEUR 2004: 24.55MEUR (Total possibility: 61.8 MEUR) FRAME FOR TRAINING FROM THE ACTIVE INSTRUMENTS 37 MEUR ADULT TRAINING FRAME 2003: 18.2 MEUR 2004: 16.8 MEUR NORMATIVE SUPPORT OF ADULT TRAINING 2003:1.73 MEUR 2004:10.55MEUR YEARLY 218 EURO/P Amount Law on Vocational Training Contributionand on the Support of Training Development (2003/LXXXVI.) MEdecreeon the rules and conditions of charging the costs of organized trainings participated by own employees occurred at those obliged to vocational training contribution andmeet by vocational training /32/2001 (IX.14)/ Lawof the Public Budget in 2003. Of Hungary Government decreeon the detailed rules of the normative support of adult training / 15/2003. (II.19)/ Law on the Support Employment and on the Supply of Unemployed (1991/IV.) ELM decree on the use of the non-school based adult training frame of employment sub-fund of Labour Market Fund /8/2003. (VII. 04.) Law on personal income tax (1995/CXVII.) Laws

  16. VET OBLIGATORY SUBSIDY (AFTER NET SALARY 1,5%) PRACTICAL TRAINING PAY IN FUND EMPLOYEES TRAINING HAND OVER FOR VET INSTITUTIONS CONTRIBUTION OF THE VET DEVELOPMENT 1. 4. 2. 3.

  17. SYSTEM OF VOCATIONAL TRAINING CONTRIBUTION • VOCATIONAL TRAINING CONTRIBUTION AS SOURCE • THOSE OBLIGED TO CONTRIBUTE • POSSIBILITIES OF FULFILLING THE OBLIGED CONTRIBUTIONS • Practical trainings of students at companies • Financial support for the purpose of development of trainings at vocational schools, high schools and tertiary institutions • TRAINING OF THE COMPANIES OWN EMPLOYEES • PAYMENTS INTO THE TRAINING SUB-FUND OF LABOUR MARKET FUND

  18. VOCATIONAL EDUCATION AND TRAINING FUND EMPLOYERS FOR THE PRACTICAL TRAINING HUNGARIAN MINORITY AND OTHER TASKS OTHER OBLIGATORY TASKS NATIONAL DEVELOPMENT PLAN VOCATIONAL EDUCATION AND TRAINING (66%) ADULT EDUCATION (33%) CENTRAL PROGRAMS REGIONAL VET BUDGET (66%) CENTRAL VET BUDGET (33%) PURPOSES OF SPENDING OF THE FUND

  19. TRAINING OF THE COMPANIES OWN EMPLOYEES • THE USABLE AMOUNT IS THE ONE THIRD OF THE TOTAL OBLIGATION, THAT IS THE 0.5% OF THE DUTY COST • AN APPLICATION ON BILLABILITY HAS TO BE SUBMITTED TO THE LABOUR CENTRES, WHICH MAKES THE DECISION

  20. RESOURCES OF THE LABOUR MARKET FUND (DETACHED STATE FUND) RESOURCES: • EMPLOYERS’ CONTRIBUTION • WORKERS’ CONTRIBUTION • PAYMENT OF VOCATIONAL TRAINIG CONTRIBUTION INTO THE TRAINING SUB-FUND • STATE BUDGET

  21. UTILIZATION OF LABOUR MARKET FUND • Solidarity sub-fund • Income subsidy sub-fund • Employment sub-fund • Wage guarantee sub-fund • Vocational training sub-fund • Rehabilitation sub-fund • Operational sub-fund • Employment sub-fund: • DECENTRALIZED SEGMENT (BY EMPLOYMENT CENTRE DECISIONS) • CENTRE SEGMENT (DECISION OF THE BOARD CONTROLLING THE LABOUR MARKET FUND) • ADULT TRAINING SEGMENT (SUGGESTION OF THE COUNCIL OF ADULT TRAINING, DECISION OF THE MINISTER)

  22. SOURCE OF THE ADULT TRAINING SEGMENT • ACCORDING TO ACT OF VOCATIONAL TRAINING CONTRIBUTION, THE SOURCE OF THE ADULT TRAINING SEGMENT IS ABOUT 1/3 OF THE VOCATIONAL TRAINING SUB-FUND, WHICH IS DECIDED ACCORDING TO THE CONSULTANCY OF THE MINISTER OF EDUCATION AND THE MINISTER OF EMPLOYMENT. • DEGREE OF VOCATIONAL TRAINING SUB-FUND: 18-20 BILLION HUF/YEAR • DEGREE OF ADULT TRAINING SEGMENT: 5-6 BILLION HUF/YEAR

  23. UTILIZATION OF ADULT TRAINING SEGMENT (BHUF)

  24. SOURCE OF THE ADULT TRAINING NORM • STATE BUDGET • BUDGET OF THE MINISTRY OF EMPLOYMENT AND LABOUR AMOUNT: • 2003: 0,475 billion HUF • 2004: 2,9 billion HUF • 2005: 3,0 billion HUF

  25. THE USE OF THE ADULT TRAINING NORM • THE TARGET GROUP OF THE SUPPORT IS THE UNSKILLED AND HANDICAPPED, AND ALSO OTHER TARGET GROUPS DEFINED BY THE GOVERNMENT • THE ALLOCATION OF THE RESOURCES IS EXECUTED BY THE MINISTRY VIA THE ACCREDITED TRAINING INSTITUTIONS • THE FORM OF THE ALLOCATION ISN’T COMPETITIVE TREND, BUT NORMATIVE SUPPORT

  26. THE PERSONAL INCOME TAX BREAK OF ADULT TRAINING • ALL OF THE ADULTS ARE ALLOWED TO DEDUCT MAXIMUM 60 THOUSAND HUF FROM THE PERSONAL INCOME TAX, IF HE/SHE HAVE PARTICIPATED IN ADULT TRAINING AND CAN VERIFY THIS. • LAW ON PERSONAL INCOME TAX • IN 2003 78 THOUSAND PEOPLE TOOK ADVANTAGE OF THIS BREAK

  27. PLANNING AND MONITORING • INFORMATION SYSTEM • PLANNING • MONITORING • CONTROLLING

  28. THANK YOU FOR YOUR ATTENTION!

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