Employment of people with reduced work capacity
What reduced work capacity means
Reduced work capacity is an umbrella term referring to a situation in which an individual’s state of health limits their ability to perform their previous job or allows them to work only with support or under special conditions. The degree of reduced work capacity is determined through a complex assessment system that evaluates medical, social and employment‑related factors.
The process for establishing reduced work capacity begins with an individual application submitted to the competent rehabilitation authority. Based on the assessment, the applicant may become eligible for benefits and receives an official decision confirming their capacity for work.
Application for reduced work capacity status
The assessment of reduced work capacity must be initiated by the applicant. The procedure begins with the submission of an application to the rehabilitation authority competent for the applicant’s place of residence. During the evaluation process, a comprehensive assessment is carried out, taking into account the individual’s state of health, capacity for work and potential for rehabilitation.
As part of the procedure, the following documents are typically required:
- medical records,
- previous hospital and outpatient diagnostic reports,
- a job description or occupational data,
- income-related documents (for the calculation of benefits).
Following the assessment, the applicant receives an official decision confirming the degree of health impairment and indicating whether the individual is eligible for rehabilitation or considered to be in a permanent condition.
Determination of reduced work capacity
The determination of reduced work capacity forms part of the comprehensive assessment procedure. During this process, specialists evaluate the individual’s condition based on medical, social and employment-related criteria. The assessment categories (B1–E) indicate the extent to which a person’s work capacity has decreased and whether rehabilitation is required or the condition is deemed permanent.
The final decision includes the percentage of health impairment as well as the individual’s entitlement to relevant benefits. This document serves as the basis for claiming any subsequent support measures or employer incentives.
Rehabilitation benefit
Rehabilitation benefit is available to people with reduced work capacity whose state of health meets the following criteria:
- 51–60% and their employability can be restored through rehabilitation based on their health status (Category B1), or
- 31–50% and they require long‑term occupational rehabilitation (Category C1),
and whose rehabilitation is expected to be successful.
The benefit may be granted from the day following the date on which the assessment decision becomes final, for the period necessary to complete the rehabilitation programme.
Beneficiaries are required to cooperate with the rehabilitation authority. This includes appearing at the authority at the specified times, fulfilling notification obligations, actively seeking employment, and accepting offered rehabilitation services, supported training opportunities or job offers.
Payment of the benefit may be suspended if the beneficiary fails to cooperate with the authority for reasons attributable to them.
The period during which the benefit is paid qualifies as pensionable service time. Accordingly, a 10% pension contribution is deducted from the benefit.
People receiving rehabilitation benefit may work without any restrictions on working hours or income. The duration of the benefit cannot be extended.
Disability benefit
Disability benefit is available to individuals who, due to long‑term health impairment, are not suitable for rehabilitation and whose work capacity cannot be restored. The amount of the permanent disability benefit varies depending on previous income and the category assigned during the complex assessment. The system aims to provide stable income support for individuals who are no longer able to re‑enter the labour market.
Who qualifies as a person with reduced work capacity
Under the complex assessment system, individuals are categorised into B2, C2 and E groups. The determination considers the person’s state of health, potential for rehabilitation, qualifications and labour‑market prospects.
A person with reduced work capacity is eligible for disability benefit if:
- Their occupational rehabilitation is not recommended, and their state of health is 51–60%, and rehabilitation is not recommended (Category B2); or if rehabilitation would otherwise be feasible, but at the time of application or review the time remaining until reaching the statutory retirement age is less than five years.
- Their occupational rehabilitation is not recommended, and their state of health is 31–50% (Category C2); or if they require long‑term occupational rehabilitation and the time remaining until the statutory retirement age is less than five years.
- They can only be employed with continuous support and have a health status of 1–30% (Category D).
- They have significant health impairment, are unable to live independently or can do so only with assistance, and have a health status of 1–30% (Category E).
Recipients of disability benefit may also work without limitations on working hours or income. As the benefit does not serve as a basis for pension contributions, it does not qualify as pensionable service time.
Which employers are required to employ people with reduced work capacity
Under the employment legislation, any employer whose annual average statistical headcount exceeds 25 employees is required to employ people with reduced work capacity in a proportion of 5% of its workforce. If this requirement is not met, the employer must pay a rehabilitation contribution to the state.
Rehabilitation Contribution
Mandatory Employment Level (5%)
The mandatory 5% employment quota is calculated based on the employer’s annual average statistical headcount.
For example, an employer with 100 employees must employ at least 5 persons with reduced work capacity, otherwise a contribution liability arises.
An employee with reduced work capacity may be taken into account when calculating the reduction of the rehabilitation contribution if they meet any of the following conditions:
- The employee’s state of health is 60% or less, based on the complex assessment of the rehabilitation authority.
- They have at least 40% health impairment, supported by a valid medical opinion, authority resolution or certificate.
- Their reduced work capacity is determined at 50–100%, based on a valid expert opinion.
- They receive disability support or personal allowance for the blind.
Additionally, the employee’s contracted daily working time must be at least 4 hours.
Employers must submit a quarterly declaration on the contribution advance and pay the declared amount accordingly.
Amount of the rehabilitation contribution
The annual rehabilitation contribution per person corresponds to nine times the statutory minimum base wage applicable on the first day of the given year for full‑time employees.
As of 1 January 2026, the statutory minimum wage for monthly‑paid full‑time employees is HUF 322,800, therefore the contribution per missing employee amounts to HUF 2,905,200 per year.
The annual rehabilitation contribution payable is the product of:
- the number of employees missing from the mandatory quota, and
- the statutory contribution amount per person.
Rules on employing a mentor
Since 1 January 2021, employers have been allowed to appoint a rehabilitation mentor under Section 22/A of the Mmtv. The mentor supports the integration and work performance of employees with reduced work capacity.
Importantly, the mentor also counts towards the rehabilitative employment quota, thereby helping to reduce the employer’s contribution liability.
Available incentives for employing people with reduced work capacity
Employing individuals with reduced work capacity is not only a statutory requirement for certain employers but can also be financially advantageous. The state provides several forms of support to companies that hire employees with reduced work capacity, including tax incentives and exemptions from the rehabilitation contribution. These measures help employers integrate affected employees in a sustainable, long‑term manner.
Tax incentives available for employees with reduced work capacity
One of the most significant incentives is the reduction of the social contribution tax (szocho). This is governed by Section 13 (3) of the Social Contribution Tax Act (Szocho tv.), which provides that employers may be exempt from paying social contribution tax on the wages of employees with reduced work capacity.
Social Contribution Tax Allowance (Szocho tv. Section 13 (3))
The allowance may be applied to the employee’s gross wage, up to a maximum of twice the statutory minimum wage. In 2026, this ceiling amounts to HUF 645,600 per month.
The full allowance may be applied if the employee:
• holds a valid complex assessment, and
• the employer obtains the corresponding official certificate prior to the commencement of employment.
Administration of employing people with reduced work capacity
Accurate, up‑to‑date administration is essential when employing people with reduced work capacity. Properly documented employment is not only important during audits conducted by the National Tax and Customs Administration (NAV), but also a prerequisite for claiming any available benefits related to the rehabilitation contribution.
Tax allowance for people with reduced work capacity
A severely disabled individual may reduce their tax base by one‑third of the monthly minimum wage (rounded to the nearest HUF 100) for each eligible month, provided they submit a personal allowance declaration to their employer.
A person is considered severely disabled for the purpose of this allowance if they suffer from a condition listed in the government decree on recognised severe disabilities, or if they receive disability allowance or personal allowance for the blind.
A month qualifies if the disability status exists for at least one day of that month, as confirmed by an official certificate or authority decision.
Additional paid leave
Employees who have reduced work capacity, are entitled to disability support or receive the personal allowance for the blind are entitled to 5 days of additional annual leave.
Employer responsibilities and documentation
Employers are not required to report the employment of people with reduced work capacity to the rehabilitation authority.
The employer’s main obligation is to retain all documents proving the employee’s rehabilitation status (e.g., rehabilitation card, medical expert opinion). These documents are essential for lawful data reporting and for claiming applicable benefits.
Employment‑related data must be submitted to NAV as part of the employer’s regular tax filings.
Steps of the rehabilitation placement process
If the employer cooperates with the employment authority, they may obtain employees through a rehabilitation placement process. The steps are as follows:
- Contacting the employment department of the district office.
- Submitting a staffing request for a specific position.
- Receiving personalised job placement assistance, through which the authority helps identify suitable candidates.
This placement system not only speeds up the recruitment process but also provides a transparent and documented background.
Role and reporting of a rehabilitation mentor
A rehabilitation mentor supports the integration of employees with reduced work capacity by assisting with daily adaptation, monitoring progress and helping the employer build an effective working relationship.
Requirements for employing a mentor include:
- at least 20 hours per week of employment,
- appropriate qualifications and experience (e.g., in social work, pedagogy, HR),
- inclusion in the employer’s internal documentation.
Importantly, the mentor also counts towards the rehabilitative employment quota, thus contributing to the reduction of the employer’s rehabilitation contribution liability.