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

Hayley Maguire
Hayley Maguire - [email protected]
What the Austrian government's new pension package means for you
Prices are expected to stay high in Austria for a while longer, despite inflation finally falling. (Photo by moerschy / Pixabay)

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".

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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.

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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.

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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.

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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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