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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
Austria's pensioners are set to receive more money from 2023 to offset the high cost of living. (Photo by moerschy from Pixabay)

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.

FOR MEMBERS: EXPLAINED: How to keep energy bills down in Austria

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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MONEY

‘I’m still waiting’: Foreigners in Austria still not been paid Klimabonus handout

Millions of residents in Austria were sent €500 one-off payment by the state to help them deal with the increasing cost of living. But many people (especially foreigners) who were entitled still haven't received their money.

'I'm still waiting': Foreigners in Austria still not been paid Klimabonus handout

The Klimabonus, a €500 one-off payment sent out by the Austrian government to (almost) everyone who lives in the country to help cushion inflation costs, has been a heated topic since it was first announced.

So far, more than 7.4 million people have received the bonus via a bank transfer, while more than 1.2 million got vouchers that could be redeemed in stores or for cash, according to the Climate Ministry. 

Anyone who has lived in Austria for at least 183 days during the year 2022 is entitled to the 2022 payment. People who only fulfilled the requirement in the second half of 2022 (newborn babies and recently relocated residents) will receive the total 2022 Klimabonus amount in the second wave of payments set for February 2023.

READ ALSO: Reader question: Is travelling to Austria this winter worth it?

However, many who have already fulfilled the criteria in the first semester are still waiting for their payments. One reader who asked not to be identified said: “I have lived in Vienna for over three years. I have a rental apartment, health insurance, and accurate financial information on FinanzOnline. I also have a Handy Signatur and a bank account at BAWAG PSK.”

“But I never received my Klimabonus or a voucher.” 

Igor Zuljic, a Croatian national who has lived in Austria for more than 30 years, is also still waiting to receive his payment. 

“I have been doing my Steuerausgleich every year. So they have my details and my bank account. I received money before from the Finanzministerium“, said the 37-year-old.

“I think it was just a huge administrative task that they just couldn’t perform because it was too massive”, he said.

Lack of transparency

The government said that some groups of EU citizens or third-country nationals were affected by “some problems with the automated entitlement check by the Ministry of the Interior”.

“​​Every effort is being taken to find a solution, please bear with us. You will receive your payment for 2022 in the second wave of payments starting February 2023)”, the authorities said.

The exact number of people affected is unclear, and the Ministry hasn’t replied to Austrian media asking the reasons for the delays, what exactly is being checked or whether there is a connection with the countries of origin. 

READ ALSO: Klimabonus: Payments complete for the Austria-wide scheme

Broadcaster ORF estimates that as many as 300,000 people could be affected. 

As the government said that around 400,000 people would receive a payment in February, the website removed the estimated number of people who moved to or were born in Austria in the first half of the year, about 100,000, to reach the 300,000 estimate.

A hard-to-reach hotline

The reader that reached out said she tried calling the hotline, but they would not talk to her as she doesn’t speak German.

“They said in English that they would only talk to me in German”, she said. Her husband got his Klimabonus via voucher early on, she added. 

READ ALSO: Klimabonus in Austria: What to do if you miss the pickup deadline for your voucher

According to the daily Der Standard, there are currently 140,000 “open tickets” in the Klimabonus “service centre” – though there could be double reports, so the number doesn’t necessarily equate to the number of people affected. 

The website reported cases of people finding the hotline often unavailable, not getting promised callbacks or simply being hung up on complicated questions.

The Ministry stated that the employees of the Klimabonus hotline receive regular training and that “various quality assurance processes” are in place.

What is the Klimabonus?

With rising inflation, mainly due to the increasing energy costs, people in Austria have seen their salaries purchasing less and less. Because of that, the federal government announced a €6 billion package with assistance, tax cuts and one-off payments.

The main (and somewhat controversial) payment is the so-called “climate bonus and anti-inflation payment”, better known as Klimabonus in Austria. Residents of the country will receive €500 to help cushion the effects of climbing prices. Minors are entitled to half that amount.

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

The only criterion is that the recipient must have lived in Austria for at least 181 days in 2022 to be eligible for the payment. Your nationality or employment status doesn’t matter – if you have spent six months legally in 2022 in the country, you will get the money.

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