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ENERGY

UPDATED: Why some households in Vienna are set for a gas price hike

Wien Energie is reportedly planning to double the price of heating for hundreds of thousands of residents in Austria's capital city.

A person changing the heating setting on a radiator. The coalition has pledged financial support people in Germany.
Wien Energie is reportedly planning to double district heating prices. Photo: picture alliance/dpa/dpa-Zentralbild | Fernando Gutierrez-Juarez

Around 440,000 households in Vienna who have district heating will find their bills are to rise by 92 percent, or almost double, according to information from the Kronen Zeitung newspaper.

Wien Energie also confirmed the information to broadcaster ORF on Tuesday evening and is set to submit an application about the price increase to the City of Vienna in the coming days.

For the average household, the increase means additional expenditure of around €45 per month, or €540 per year.

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Vienna’s Mayor Michael Ludwig (SPÖ), told the Kurier on Wednesday the price hike is “not set in stone”, but that he has limited powers to stop it as the measure is a “necessity resulting from the operational management of Wien Energie”.

Additionally, even though Ludwig has the final say on the price increase, he can only refuse the proposal if it greatly exceeds international price developments.

Part of the reason for the proposed increase is that two-thirds of district heating is generated from gas, which Austria largely imports from Russia. 

According to the Kronen Zeitung, Wien Energie argues the price increase is due to the global energy crisis and the fact that the Austrian gas price index last month rose by more than 470 percent compared to May 2021.

The report also says Wien Energie “needs the money to achieve the goal of climate neutrality and to be able to phase out gas”, with planned investments of €1 billion earmarked for the transformation.

READ MORE: What is Austria planning to do to cushion the rising cost of living

Executive City Councillor Peter Hanke (SPÖ) said: “We are in talks with Wien Energie. More details will follow soon.”

In the past 25 years, there have only been four increases in the price of district heating in Vienna.

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MONEY

What the Austrian government’s new pension package means for you

The minimum pension in Austria is set to rise by 10 percent in a move dubbed by the Austrian Federal Government as "social policy in action".

What the Austrian government's new pension package means for you

The Austrian Federal Government has announced plans to increase the minimum pension by 10.2 percent as part of anti-inflation measures worth €4 billion.

Social Affairs Minister Johannes Rauch (Greens) described the increase as “socially fair” and “accurate” during a press conference with ÖVP club chairman August Wöginger on Tuesday October 4th.

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Around 200,000 people in Austria are currently on the minimum pension and will get the full increase. The minimum pension in Austria is €1,030 a month.

Der Standard reports that two thirds of pensioners will receive an increase of 8.2 percent, and the top fifth earners (between €2,360 and €5,670) will see their pension rise by 5.8 percent.

There will also be a one-off payment in March 2023 to compensate for the current high inflation rate. For those with a pension up to €2,000 per month, this payment will be 30 percent of a monthly payment, capped at €500. 

However, those with a pension of at least €5,670 will only receive a lump sum payment of €329 and not an increase in pension payments.

Also, the direct payments will not be taken into account during pension negotiations for 2024. 

READ ALSO: EXPLAINED: Everything you need to know about retiring in Austria

What happens next?

During the press conference, Wöginger said the proposals will be put to the National Council in mid-October.

If approved, the pension increase is expected to come into effect in January 2023.

Moving forward, the inflation level between August 2022 to July 2023 will be used to calculate the 2024 pension increase, reports the Kronen Zeitung.

Is everyone happy?

The financial package has been mostly welcomed by Austria’s political parties, although the New Austria and Liberal Forum (NEOS) has questioned how the government intends to finance it, reports Kurier.

The Freedom Party of Austria (FPÖ) rejected the proposal as “deception” and said all pensioners should receive a 10 percent increase.

The Senior’s Association and Pensioner’s Association have also criticised the move as not going far enough. Representatives said there were no final talks after two rounds of negotiations.

The Wiener Zeitung reports that the organisations called for a 10 percent increase for all pensioners.

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