FINANCING OFFURTHER PROFESSIONAL

TRAININGIN 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 TARGET GROUPS OF PUBLIC MONEY

DISTRIBUTION IN THE FIELD OF ADULT TRAINING

THE MAIN SYSTEMS OF PUBLIC FINANCE

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

TOPICS OF THIS PRESENTATION 2.

WHAT IS THE FURTHER PROFESSIONAL TRAINING?

HUNGARIAN SLIDES: 5 THE INTERNATIONAL SLIDES ALTOGETHER

28.500 Very different form:

TRADITIONAL FORM EVENING FORM DISTANCE FORM …

13

76.7

0

25

50

75

100

SK NO CZ SI PL HU IE SE FI AT CY CH LT EL EE BE FR DK UK EU25 BG LV RO NL DE IT LU ES IS PT MT

2003

1999

1995

Population aged 20-24 with at least upper secondary education and training, 1995, 1999, 2003 (%)

Denmark and Hungary: 2002; partly estimated and provisional data.Source: Eurostat - NewCronos database

Benchmark for 2010:85% of 22 years old

15

16.0

0

10

20

30

40

50

SI SK CZ PL NO CH SE AT DK FI HU EE LT IE BE DE FR NL CY EL EU25 UK LU LV BG RO IT IS ES PT MT

1996

2000

2003

Early school leavers (a) in Europe, 1996, 2000, 2003 (%)

(a) Persones aged 18 to 24 with ISCED 0-2 as highest level of education or training and who declared not having received any education or training in the 4 weeks preceding the survey.NB: partly estimated by Eurostat; break in time series for several countries Source: Eurostat - NewCornos database

Benchmark for 2010: 10% on EU average

18

9.0

0

10

20

30

40

SE CH IS UK NO DK FI NL SI IE EU25 BE LV AT CY FR LU EE DE HU ES CZ PL SK IT LT MT PT EL BG RO

2003

2000

1996

Benchmark for 2010: 12.5% on EU average

Participation of adults * in lifelong learning **, 1996, 2000, 2003 (%)

* 25 to 64 years old; ** participation in education and training over the four weeks prior to the survey.NB: partly estimated by Eurostat; break in time series for several countriesSource: Eurostat-NewCronos database

LEGISLATIVE FRAMEWORK

Public Education Act (1993, LXXIX) Higher Education Act (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)

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 Office and

Employment centres)

Accreditation Body for Adult

Education

Employment councils

National Council of Adult Education

National Council of Reconciliation

Professional bodies of NQR

Registered adult training companies

9 regional training centres

Accredited adult training companies and higher

educational institutions

Vocational schools

Level of educators

Level of bodies

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

TARGET GROUPS OF CVET

EMPLOYED PEOPLE

UNEMPLOYED PEOPLE• SHORT TERM UNEMPLOYED

• LONG TERM UNEMPLOYED

INACTIVE PEOPLE• SHORT TERM INACTIVE PEOPLE

• LONG TERM INACTIVE PEOPLE

• RETIRED PEOPLE

TARGET GROUPS OF THE CVET

PEOPLE WITH DIFFERENT SCHOOL QUALIFICATION (S):• WITHOUT GCSE• WITH GCSE• WITHOUT • WITH QUALIFICATION (S)

ACTIVE PEOPLE WITH WORKPLACE INACTIVE PEOPLE

• SHORT TERM• LONG TERM • RETIRED

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

AIMS OF PUBLIC MONEY

• Registeredunemployed,

• People endangeredby reported Expected unemploymentaccording to act

TARGET GROUPS: • Disadvantaged• Career-starter • Aged people• Handicapped• People on Child-care

support or on child-care allowance

• Inactive • Homelessness• Etc.

TARGETS:• Development;

• Economic development;

• Change in structure;

• Development of technology;

• Stimulation of investments;

• Development of trainingInfrastructure;

• Development of curriculum;

• Development ofmethodology;

• Development of services.

DISTRIBUTION AND ITS TARGET GROUPS IN ADULT TRAININGS

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

NON-SCHOOL BASED ADULT TRAINING STATE SUPPORT RESOURCESR

es

ou

rce

s

STATE BUDGET&MINISTRY BUDGET

LABOUR MARKET FUND

OBLIGATION OF VOCATIONAL

TRAININGCONTRIBUTION

NORMATIVE SUPPORT OF

ADULT TRAINING2003: 1.73 MEUR

2004: 10.55 MEUR

EMPLOYMENT sub-fund

FRAME FOR TRAINING FROM

THE ACTIVE INSTRUMENTS

37 MEUR

ADULT TRAINING

FRAME2003: 18.2 MEUR2004: 16.8 MEUR

33% OF THE OBLIGATION OF

VOCATIONAL TRAINING CONTRIBUTION

2003: 17.53 MEUR2004: 24.55 MEUR(Total possibility:

61.8 MEUR)

UNSKILLED, DISADVANTAGED

UNEMPLOYED THOSE WHOARE ABOVE

THE AGE OF 16

OWN EMPLOYEES

Law of the Public Budget in 2003.

Of HungaryGovernment decree on the detailed rules of the

normative support of adult training

/ 15/2003. (II. 19)/

Law on Vocational Training Contribution and on the Support of

Training Development (2003/LXXXVI.)ME decree on the rules and conditions

of charging the costs of organized trainings participated by own

employees occurred at those obliged to vocational training contribution and meet by vocational training /32/2001

(IX. 14)/

TAX BRAKE

YEARLY218

EURO/P

PARTICIPANT IN ADULT TRAINING

Law on personal

income tax(1995/CXVII.)

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.)

Am

ou

nt

Ta

rge

t g

rou

ps

La

ws

VETOBLIGATORY SUBSIDY

(AFTER NET SALARY 1,5%)

EMPLOYEESTRAINING HAND OVER

FOR VETINSTITUTIONS

PAY IN FUND

PRACTICAL TRAINING

CONTRIBUTION OF THE VET DEVELOPMENT

1.

3.

4.

2.

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

VOCATIONAL EDUCATION AND TRAINING FUND

EMPLOYERS FOR THE PRACTICAL TRAINING

HUNGARIAN MINORITYAND OTHER TASKS

NATIONALDEVELOPMENT PLAN

ADULT EDUCATION(33%)

VOCATIONAL EDUCATION AND TRAINING (66%)

CENTRAL VET BUDGET(33%)

CENTRAL PROGRAMS

OTHER OBLIGATORY TASKS

REGIONAL VET BUDGET (66%)

PURPOSES OF SPENDING OF THE FUND

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

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

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-fundEmployment 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)

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

UTILIZATION OF ADULT TRAINING SEGMENT (BHUF)

TARGET GROUPS 2002 2003 2004 2005

DEVELOPMENT 400 2585 2564 2700

INFRASTRUCTURE 400 1400 705 700

TRAINING FOR DEVELOPMENT PURPOSES

0 1035 1141 1200

DEVELOPMENT STIMULATION 0 150 718 800

LAYER PROGRAMS 25 1000 161 1500

MEDIA, TELE-EDUCATION 945 0 550 500

RESEARCHES, SURVEYS, PREPARATIONS FOR DECISION MAKING

321 375 465 400

HRD OP 0 0 152 1076

OTHERS 340 0 0 0

TOTAL 2030 3960 3893 6176

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

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

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

PLANNING AND MONITORING

INFORMATION SYSTEM PLANNING MONITORING CONTROLLING

THANK YOU

FOR YOUR ATTENTION!