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Gyulavari, Tamas --- "Structure and social protection of the self-employed society: an Eastern-European perspective based on Hungarian experience" [2019] ELECD 1079; in Westerveld, Mies; Olivier, Marius (eds), "Social Security Outside the Realm of the Employment Contract" (Edward Elgar Publishing, 2019) 162

Book Title: Social Security Outside the Realm of the Employment Contract

Editor(s): Westerveld, Mies; Olivier, Marius

Publisher: Edward Elgar Publishing

Section: Chapter 8

Section Title: Structure and social protection of the self-employed society: an Eastern-European perspective based on Hungarian experience

Author(s): Gyulavári, Tamás

Number of pages: 15

Abstract/Description:

The traditional employment relationship is still the dominant form of employment in Central and Eastern Europe. As a consequence of the traditional binary model, self-employment is the only alternative to employment relationships. However, the official figure for self-employment is still around 10–20% of workers and it is slightly decreasing in several countries, including Hungary. Hungarian self-employed persons pay the same contributions and are entitled to the same social security services as employees. Since the level of social security contributions is extremely high, self-employed workers do their best to minimize these payments. In addition, the quality of the potential social services is very poor. Thus, self-employed persons pay high contributions or undertake the risks of undeclared work or opt for a special taxation scheme. These popular reduced schemes are quite problematic, since they impose a much lower public burden; however, the available social rights are also very limited. Therefore, a major revision of this statutory two-pillar system is highly desirable.