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Austria announces it will issue one-off cost of living payments

Austria has announced it will issue one-off payments aimed at offsetting rising inflation costs in the country.

Austria announces it will issue one-off cost of living payments
Crowds walk down the famous shopping street Mariahilferstrasse, in Vienna. Photo: JOE KLAMAR / AFP

Austria’s National Council has announced one-off payments which will ease the current cost of living crisis for certain financially vulnerable groups, Der Standard reported.

At the end of April, pensioners on minimum incomes, long-term recipients of sickness and rehabilitation benefits, the unemployed and unemployment assistance recipients will receive €150.

Separately households that receive minimum income or social assistance and students with study grants will receive €300.

For retired people receiving supplementary allowances, there will be two payments of €150.

With the exception of the liberal party Neos, the opposition was largely in favour of the legislative changes

However, parliamentarians from opposition parties said the one-off payments would not be enough to compensate for high inflation, especially as Russia’s invasion of Ukraine puts further pressure on prices.

SPÖ politician Gabriele Heinisch-Hosek appealed to the government to at least bring forward the payments by a month.

Neos MP Gerald Loacker said that “one-time payments will not help”, as prices will continue to stay high. 

The government, however, was eager to highlight the benefits of the package.

For those without jobs, it will be at least a “small compensation” for increasing energy costs, Labor Minister Martin Kocher (ÖVP), said. 

According to Statistik Austria, inflation rates in Austria reached 5 percent in January 2022, driven by a spike in fuel and household energy prices

This reflects the highest level of inflation since December 1984, Statistik Austria’s head Tobias Thomas told ORF.

Gas prices rose by 41 percent compared to January 2021 and there also steep hikes in the cost of petrol and diesel fuel. Heizöl, which can be used for heating and fuel, saw a 45.8 percent increase over the same period.

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COST OF LIVING

When will you get your cost of living ‘bonus’ payments in Austria?

Austria's package to fight the rising cost of living includes several "bonus" payments for residents in Austria. Here is when you can expect them.

When will you get your cost of living 'bonus' payments in Austria?

Austria’s federal government has unveiled a series of measures worth billions of euros to fight the cost of living crisis. New steps include increasing family allowances, cutting taxes and sending out one-off welfare payouts, as The Local has reported.

However, the authorities were not specific on when payments are to be expected, though they mentioned most of the measures would be in place “by October”.

READ ALSO: EXPLAINED: How Austria’s new finance measures could benefit you

On Wednesday, party leaders Sigrid Mauer (Greens) and August Wöginger (ÖVP) presented a roadmap to lay out when each aid could be expected.

Aid payouts

Low-income and vulnerable people in Austria, such as pensioners receiving minimum payments and aid recipients will receive a one-off €300 payment (Teuerungsausgleich) as compensation for inflation. The date is not set yet but should be in August and September.

The most significant payment will be the €500 sum, which consists of €250 as a climate bonus (Klimabonus) and €250 for the “anti-price increase” bonus (Teuerungsbonus). Everyone in Austria will receive that assistance (children receive half of the total amount) in October.

READ ALSO: Austria unveils €6 billion package to fight rising cost of living

An additional one-off payment of the family allowance (Familienbeihilfe) of €180 will be sent for those already on the program in August.

The timeline, according to Mauer, makes it so that the most vulnerable, including low-income people and families, will receive assistance first. Then, in autumn, the payments will go out on a broader scale.

Changes in bonuses and CO2 tax

The anti-inflation package also contains increases in existing family bonuses and payments.

The family bonus (Familienbonus) deduction increases from €1,500 to €2,000, and the increase for additional children payments (Kindermehrbetrags) to €550 is already in force for the fiscal year of 2022, so it will be valid in 2023.

READ ALSO: EXPLAINED: The main Austrian ‘tax traps’ foreigners should be aware of

The CO2 tax was postponed from July to October in time for the climate bonus payments, which were meant to offset the costs of the tax.

Finally, the end of the cold progression, the term used to describe increases in tax burdens which are based on increases in income but do not account for inflation, is set for 2023.

All the changes still need to be officially approved by Parliament and signed into law. For the measures to take place as soon as possible, a special meeting of the National Council was called for this Thursday, June 23rd.

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