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EXPLAINED: How does the Austrian pension system work?

Already living and working in Austria? Or planning to retire in the Alpine Republic in the future? Here’s what you need to know about the pension system.

EXPLAINED: How does the Austrian pension system work?
How comfortable is an Austrian pension? Photo by Huy Phan on Unsplash

Austria is known for having a strong social security system and a generous pension plan.

This makes it an attractive place for people to retire – whether they have already lived and worked in the country or not.

How does the Austrian pension system work?

Austria has a compulsory pension system for all employed people, including those that are self-employed.

The pension age in Austria is 65 for men and 60 for women, but there are plans for the Austrian government to raise the pension age for women to 65 by 2033.

However, to qualify for a state pension, you need to contribute to the Austrian welfare system for 15 years – usually through employment.

FOR MEMBERS: Five reasons to retire in Austria

Early retirement is possible, as long as you have contributed for 15 years, but pension payments will be smaller until the age of 65.

Alternatively, people can receive a bonus for working past the statutory retirement age.

Austria pension rates and contributions

In Austria there are three pillars to the pension system: state, occupational and private. 

Then there are two types of pension: contributory and non-contributory.

Contributory means employees pay a percentage towards their pension out of their salary, followed by another percentage from the employer.

Some people are also eligible for government contributions, such as military personnel or those caring for relatives.

The Austrian pension system is basically a pay-as-you-go scheme with 10.25 percent of an employee’s gross salary paid towards pension contributions.

Employers then contribute a further 12.55 percent towards an employee’s pension.

For self-employed people in Austria, pension contributions are part of the overall social security payments to the Social Insurance Institute for Self-Employed Persons (SVS).

State pensions

The state pension in Austria is a statutory old-age pension and is known as the first pillar in the Austrian pension system.

Anyone can claim a state pension in Austria as long as they meet the required age and the number of years of contributions within the country.

But the amount a person receives depends on how much has been paid into the individual pension account. 

READ MORE: What is Austria’s Handy-Signatur and how does it work?

The total in the pension account is made up from contributions through employment, periods of partial insurance and voluntary insurance payments.

An individual pension account can be viewed online with a citizen card or a Handy-Signatur via the FinanzOnline website or by contacting your pension provider.

Occupational pensions

Since 1990, Austria has had its own labour laws for company pension schemes, known as the Company Pension Act.

Occupational pensions (second pillar) are not mandatory and involve making additional contributions. They are designed to help people continue with a certain standard of living into retirement.

With occupational pensions, there is typically a vesting period of up to three years. After this time, the employee contributions are preserved.

Private pensions

Private pensions, or the third pillar, were introduced in Austria in 2003 to promote private investments for retirements, as well as the Austrian capital market.

This type of pension is typically offered by way of annuity insurance and pension investment funds.

Since 2009, for people up to the age of 45, the share quota of the plans has been 30 percent. There is then a reduction of the share quota based on the age of the contract holder (known as the life cycle model).

For example, for people between the age of 45 and 55, the share quota is 25 percent. But from the age of 55, the quota is 15 percent.

Pensions from other countries

As Austria is an EU member state, this means people can transfer a state pension from another EU country to a bank in Austria.

However, the amount you receive will depend on the rules in the country that pays the pension.

READ MORE: 11 Austrian life hacks that will make you feel like a local

Austria also has social security agreements with countries outside of the EU, such as the US, Canada, Australia, Serbia and Israel, with most agreements linked to employment in Austria.

For people from the UK, there is the option to transfer a pension into a Recognized Overseas Pension Scheme (ROPS), which allows pension funds to be consolidated together into one plan.

But as with all things related to finance, it’s recommended to seek advice from a financial expert when it comes to moving pension pots overseas.

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LIVING IN AUSTRIA

How to dispose of unwanted furniture or whitegoods in Vienna legally

Got an unwanted mattress, fridge, or sofa? Here’s how you can legally get it off your hands in Vienna.

How to dispose of unwanted furniture or whitegoods in Vienna legally

If you find yourself with a large piece of furniture or big household appliance that has seen its prime and is not bound to the trashcan, then you might be wondering where to dispose of them – legally, that is.

Even if it is not uncommon to see furniture or appliances next to the big trashcans often placed near households and apartment complexes, it is illegal to leave them there.

Different cities have different methods – some will even pick up trash at specific times and places. To know how your city deals with bulky waste (Sperrmüll), you can google “Sperrmüll + the name of your city”.

READ ALSO: Why does Vienna’s waste department have a helicopter and a military plane?

Vienna has several waste collection points where you can leave bulky waste, electrical appliances, hazardous waste (in household quantities) and other old goods for no charge.

The use of the Wiener Mistplätze is subject to certain quantity limits and requirements, but they are to avoid industrial use. Therefore, most households will have no problem with the limitations.

Here you can find several collection points in Vienna.

It is worth pointing out that delivery to those sites can only be made by cars with Viennese license plates, on foot or by bicycle. Furthermore, no trailers or company cars are allowed to leave trash at these collection points.

What can you bring to the collection centres?

This is the place to bring large sheets of plastic foil, bulky or large metal parts and electrical appliances, for example.

Additionally, you can bring small amounts of bulky waste, wood, styrofoam, large cardboard boxes, green waste and used tires to any waste collection centres.

Depending on what you are disposing of, you might need to go to the Rinter centre, one of the larger ones.

READ ALSO: Hasta la mista, baby? How to vote for your favourite Vienna trash can joke

The centres also have a separate division where it is possible to donate old items still in good condition, the so-called 48er-Tandler-Box.

Tableware, small furniture, electrical appliances, clothes, toys and other items can be reused and bought at a low price at the 48er-Tandler reuse shop.

Most centres are open only from Monday to Friday during business hours, but others are also available on Saturdays.

What to do if I don’t have a car?

If you don’t need a car but still need to dispose of a large appliance, the Viennese solution varies.

Some will take public transport with a couple of friends trying to help them carry an old sofa via the u-bahn, although that can get a little tough at peak hour. 

Alternatively, you can borrow or rent a vehicle to try and save costs.

READ ALSO: The downsides of Vienna you should be aware of before moving there

But Vienna City also has a service that will pick up the trash for a low fee – even if it is located in the attic, a basement or a courtyard.

It’s the Entrümpelungsdienst und Sperrmüllabfuhr der MA 48. You can also ask for the “dump service” when the city of Vienna brings a trough (the smallest can fit 12 cubic meters).

Once you fill it up, they will remove it and take it to the appropriate place.

Costs will depend on the amount of trash, the size of the appliance, and where in the household it is located.

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