Chapter 2

BENEFITS UNDER THE LEGISLATION OF CANADA

Article XV

Benefits under the Old Age Security Act

1. If a person is eligible for an Old Age Security pension or an allowance solely through the application of the totalizing provisions of Chapter 1, the competent institution of Canada shall calculate the amount of the pension or allowance payable to that person in conformity with the provisions of the Old Age Security Act governing the payment of a partial pension or an allowance, exclusively on the basis of the periods of residence in Canada which may be considered under that Act.

2. Paragraph 1 shall also apply to a person outside Canada who would be eligible for a full pension in Canada but who has not resided in Canada for the minimum period required by the Old Age Security Act for the payment of a pension outside Canada.

3. Notwithstanding any other provision of this Agreement:

a) an Old Age Security pension shall be paid to a person who is outside Canada only if that person’s periods of residence, when totalized as provided in Chapter 1, are at least equal to the minimum period of residence in Canada required by the Old Age Security Act for the payment of a pension outside Canada;

b) an allowance and a guaranteed income supplement shall be paid to a person who is outside Canada only to the extent permitted by the Old Age Security Act.

Article XVI

Benefits under the Canada Pension Plan

If a person is eligible for a benefit solely through the application of the totalizing provisions of Chapter 1, the competent institution of Canada shall calculate the amount of benefit payable to that person in the following manner:

a) the earnings-related portion of the benefit shall be determined in conformity with the provisions of the Canada Pension Plan, exclusively on the basis of the pensionable earnings under that Plan;

b) the flat-rate portion of the benefit shall be determined by multiplying:

(i) the amount of the flat-rate portion of the benefit determined in conformity with the provisions of the Canada Pension Plan

by

(ii) the fraction which represents the ratio of the periods of contributions to the Canada Pension Plan in relation to the minimum qualifying period required under that Plan to establish eligibility for that benefit, but in no case shall that fraction exceed the value of one.

Chapter 3

BENEFITS UNDER THE LEGISLATION OF THE REPUBLIC OF HUNGARY

Article XVII

Calculating the Amount of Benefit Payable

1. If, under the legislation of the Republic of Hungary, eligibility for a benefit can be established solely through the application of the totalizing provisions of Chapter 1, the competent institution of the Republic of Hungary:

a) shall calculate the theoretical amount of the benefit which would be paid if the totalized creditable periods accumulated under the legislation of both Contracting Parties had been accumulated under the legislation of the Republic of Hungary alone; and

b) on the basis of the theoretical amount calculated in accordance with sub-paragraph a), shall determine the actual amount of benefit payable by applying the ratio of the length of the creditable periods accumulated under the legislation of the Republic of Hungary to the total creditable periods accumulated under the legislation of both Contracting Parties.

2. For purposes of calculating the amount of a benefit through the application of paragraph 1, only income earned under the legislation of the Republic of Hungary and contributions paid under that legislation shall be taken into account.

Part IV

ADMINISTRATIVE AND MISCELLANEOUS PROVISIONS

Article XVIII

Administrative Arrangement

1. The competent authorities of the Contracting Parties shall establish, by means of an administrative arrangement, the measures necessary for the application of this Agreement.

2. The liaison agencies of the Contracting Parties shall be designated in that arrangement.

Article XIX

Mutual Assistance

1. The competent authorities and institutions responsible for the application of this Agreement:

a) shall lend their good offices and furnish assistance to one another for the purpose of determining eligibility for, or the amount of, any benefit under this Agreement, or under the legislation to which this Agreement applies, as if the matter involved the application of their own legislation;

b) shall communicate to each other, as soon as possible, all information about the measures taken by them for the application of this Agreement or about changes in their respective legislation in so far as these changes affect the application of this Agreement.

2. Subject to paragraph 3 and to any provision contained in an administrative arrangement concluded pursuant to Article XVIII for the reimbursement of certain types of expenses, the assistance referred to in sub-paragraph 1a) shall be provided free of charge.

3. If the competent institution of a Contracting Party requires that a claimant or a beneficiary who resides in the territory of the other Contracting Party undergo a medical examination, the competent institution of the latter Contracting Party, at the request of the competent institution of the first Contracting Party, shall make arrangements for carrying out this examination. If the medical examination is exclusively for the use of the institution which requests it, that competent institution shall reimburse the competent institution of the other Contracting Party for the costs of the examination. However, if the medical examination is for the use of both competent institutions, there shall be no reimbursement of costs.

Article XX

Transmission and Protection of Personal Information

1. The competent authorities and institutions of a Contracting Party shall, in accordance with:

a) the legislation of that Contracting Party, and

b) this Agreement or any arrangement concluded pursuant to Article XVIII for the implementation of this Agreement, transmit to the competent authorities and institutions of the other Contracting Party any information in their possession about an individual required for the application of this Agreement or of the legislation to which this Agreement applies.

2. Any information about an individual transmitted under paragraph 1 by a competent authority or institution of a Contracting Party to a competent authority or institution of the other Contracting Party shall be protected in each Contracting Party in accordance with its legislation and the following provisions:

a) The competent authority or institution of the Contracting Party to which the information is transmitted shall treat that information as confidential and shall effectively protect it against unauthorized access, unauthorized alterations and unauthorized disclosure in accordance with the legislation of that Contracting Party.

b) The competent authority or institution of the Contracting Party to which the information is transmitted may use that information, and may disclose it to other institutions and agencies in that Contracting Party, for the purposes of implementing this Agreement or the legislation of that Contracting Party. The information may be put to other uses and may be disclosed to other bodies only to the extent specifically permitted under the legislation of that Contracting Party. The competent authorities of the Contracting Parties shall inform each other about all amendments to their legislation regarding the protection of personal information and, in particular, additional purposes for which such information may be used or disclosed to other bodies. The Contracting Party whose legislation has been amended shall, at the request of the other Contracting Party, enter into negotiations to amend or supplement this Agreement, as may be required.

c) In individual cases, the competent authority or institution to which the information is transmitted shall, at the request of the competent authority or institution which has transmitted that information, inform the latter of the use to which that information has been put and the outcome thereof.

d) The individual concerned shall, on request to the authority or institution of either Contracting Party, have the right to be informed of the information which has been transmitted, and the purpose for which that information has been requested or transmitted, as the case may be.

e) The competent authority or institution which transmits the information shall take all reasonable steps to ensure that the information is accurate and is strictly limited to that absolutely necessary for the purpose of the transmission. If it becomes evident that incorrect information or information whose transmission is prohibited under the legislation of the transmitting Party was transmitted, the competent authority or institution which has received the information must be immediately notified of this fact and it shall immediately correct incorrect information. It shall also 13 delete any transmitted information whose transmission is prohibited unless that information is required to combat abuse or to prosecute fraud in the context of the legislation which it administers or other similar offences.

f) The competent authority or institution of the Contracting Party to which the information is transmitted shall delete that information in accordance with the legislation of that Contracting Party.

Article XXI

Exemption or Reduction of Taxes, Dues, Fees and Charges

1. Any exemption from or reduction of taxes, legal dues, consular fees and administrative charges for which provision is made in the legislation of a Contracting Party in connection with the issuing of any certificate or document required to be produced for the application of that legislation shall be extended to certificates or documents required to be produced for the application of the legislation of the other Contracting Party.

2. Any documents of an official nature required to be produced for the application of this Agreement shall be exempt from any authentication by diplomatic or consular authorities and similar formality.

Article XXII

Language of Communication

For the application of this Agreement, the competent authorities and institutions of the Contracting Parties may communicate directly with one another in any official language of either Contracting Party.

Article XXIII

Submitting a Claim, Notice or Appeal

1. Claims, notices and appeals concerning eligibility for, or the amount of, a benefit under the legislation of a Contracting Party which should, for the purposes of that legislation, have been presented within a prescribed period to a competent authority or institution of that Contracting Party, but which are presented within the same period to an authority or institution of the other Contracting Party, shall be treated as if they had been presented to the competent authority or institution of the first Contracting Party. The date of presentation of claims, notices and appeals to the authority or institution of the other Contracting Party shall be deemed to be the date of their presentation to the competent authority or institution of the first Contracting Party.

2. Subject to the second sentence of this paragraph, a claim for a benefit under the legislation of a Contracting Party made after the date of entry into force of this Agreement shall be deemed to be a claim for the corresponding benefit under the legislation of the other Contracting Party, provided that the applicant at the time of application:

a) requests that it be considered an application under the legislation of the other Contracting Party, or

b) provides information indicating that creditable periods have been completed under the legislation of the other Contracting Party.

The preceding sentence shall not apply if the applicant requests that his or her claim to the benefit under the legislation of the other Contracting Party be delayed.

3. In any case to which paragraph 1 or 2 applies, the authority or institution to which the claim, notice or appeal has been submitted shall transmit it without delay to the authority or institution of the other Contracting Party.

Article XXIV

Payment of Benefits

1. The competent institution of a Contracting Party shall discharge its obligations under this Agreement in the currency of that Contracting Party.

2. Benefits shall be paid to beneficiaries free from any deduction for administrative expenses that may be incurred in paying the benefits.

3. In the event that a Contracting Party imposes currency controls or other similar measures that restrict payments, remittances or transfers of funds or financial instruments to persons who are outside its territory, that Contracting Party shall, without delay, take suitable measures to ensure the payment of any amount that must be paid in accordance with this Agreement to persons described in Article III who reside in the territory of the other Contracting Party.

Article XXV

Resolution of Difficulties

1. The competent institutions of the Contracting Parties shall resolve, to the extent possible, any difficulties which arise in interpreting or applying this Agreement according to its spirit and fundamental principles. If the competent institutions have not resolved the difficulty, the competent authorities of the Contracting Parties shall do so.

2. The Contracting Parties shall consult promptly at the request of either Contracting Party concerning matters which have not been resolved by the competent institutions and authorities in accordance with paragraph 1.

3. Any dispute between the Contracting Parties concerning the interpretation of this Agreement which has not been resolved or settled by consultation in accordance with paragraph 1 or 2 shall, at the request of either Contracting Party, be submitted to arbitration by an arbitral tribunal.

4. Unless the Contracting Parties mutually determine otherwise, the arbitral tribunal shall consist of three arbitrators, of whom each Contracting Party shall appoint one within two months from the date of receipt of the request for arbitration, and the two arbitrators so appointed shall appoint, within two months after the last notice of appointment, the third who shall act as president; provided that if either Contracting Party fails to appoint its arbitrator or if the two appointed arbitrators fail to agree about the third, the competent authority of the other Contracting Party shall invite the President of the International Court of Justice to appoint the arbitrator of the first Contracting Party or the two appointed arbitrators shall invite the President of the International Court of Justice to appoint the president of the arbitral tribunal.

5. If the President of the International Court of Justice is a citizen of either Contracting Party, the function of appointment shall be transferred to the Vicepresident or the next most senior member of the Court who is not a citizen of either Contracting Party.

6. The arbitral tribunal shall determine its own procedures, but it shall reach its decisions by a majority of votes.

7. The decision of the arbitral tribunal shall be final and binding.

Article XXVI

Understandings with a Province of Canada

The relevant authority of the Republic of Hungary and a province of Canada may conclude understandings concerning any social security matter within provincial jurisdiction in Canada in so far as those understandings are not inconsistent with the provisions of this Agreement.

Part V

TRANSITIONAL AND FINAL PROVISIONS

Article XXVII

Transitional Provisions