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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?
Families in Austria will receive an extra €180 Familienbeihilfe payment in August (moerschy from Pixabay)

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 payment should be in 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.

However, retirees will receive a one-time payment of up to €500 from September 1st, depending on how much they receive as pension.

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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For members

COST OF LIVING

Why (and when) double-digit inflation is set to hit Austria

Financial experts in Austria do not expect inflation to slow down any time soon. In fact, they are predicting the opposite. Here's what you need to know.

Why (and when) double-digit inflation is set to hit Austria

In a recent interview, inflation expert Josef Baumgartner forecast that inflation in Austria will hit double-digits in the coming months.

Baumgartner, from the Austrian Institute of Economic Research (WIFO), told Kurier that residents in Austria should prepare themselves for an ongoing increase in inflation due to rising energy prices.

Baumgartner said: “We’re a long way from the all-clear. According to the announcements by Wien Energie and EVN, I expect an inflation rate of more than ten percent by September, and no later than April 2023.”

FOR MEMBERS: EXPLAINED: What is Austria’s ‘Tax Freedom Day’?

The latest estimate by Statistics Austria shows inflation was already at 9.2 percent in July, as reported by The Local.

This is in stark contrast to predictions made by the European Central Bank earlier this year when it was expected that inflation would fall in the second half of 2022.

How expensive could energy in Austria become?

WIFO expert Baumgartner based his forecast for Austria on wholesale electricity prices, which are currently 247 percent higher than in August 2021, reports ORF

Baumgartner said: “If the energy suppliers pass this on one-to-one, there is a risk of an enormous price increase.”

Additionally, Baumgartner expects prices for electricity and gas to go up by a further 50 percent in September, and was not optimistic that the planned nationwide electricity price cap will be enough to dampen energy prices.

READ MORE: Cost of living: How to save money on energy bills in Austria

He added that federal government intervention must go further to tackle gas and district heating prices.

On August 3rd, EVN and Wien Energie – both part of the Energieallianz Austria (EAA) group – announced they will be increasing energy prices from September.

EVN (which is mostly state-owned) blamed the move on price increases on the international wholesale markets.

According to ORF, Baumgartner believes these planned price increases will further impact the customer price index and push up inflation across Austria, even if the tariff changes only apply to customers in the east of the country.

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