Austria to suspend phased adjustment of pensions due to high inflation

Amanda Previdelli
Amanda Previdelli - [email protected]
Austria to suspend phased adjustment of pensions due to high inflation
(Image by Eddie K from Pixabay)

Austria's federal government is suspending a regulation of staggered pension adjustments for two years. Here's what you need to know.


Inflation in Austria continues at a high level, reaching double digits and eating away at people's salaries and pensions.

Because of that, the federal government announced they have decided to postpone the phased adjustment of pensions, which would mean lower payments for those retiring later in the year.

"We have the motto 'help for everyone who really needs it'," Social Minister Johannes Rauch (Greens) said. He added: "In times of high inflation, that, of course, also includes male and female pensioners."

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The "aliquot adjustment" of pensions (Pensionsaliquotierung) meant that the amount pensioners receive on their first retirement year would depend on when they retire. Only those who retire in January would receive a total increase based on the previous year's inflation rate. If you retire in February, only 90 percent of the pension increase would be taken into account; in March, only 80 percent and so on until November and December, when people would receive no inflation-based readjustment.


Those who work for a longer time (which is something the government is trying to incentivise to combat labour shortages) would be, in fact, penalised.

However, because of the rising cost of living, the government announced that senior citizens would receive the full pension increase regardless of when they retire.

The centre-left SPÖ, the trade union and the Seniors' Council, in particular, have been calling to abolish this regulation for some time. The SPÖ recently announced a constitutional complaint and submitted an urgent motion for the National Council session on Wednesday, which has now lapsed, according to the federal government.

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Around 100,000 affected this year

Since the first pension payment is also the basis for future increases, the aliquot regulation has a particularly negative impact in the long term in the event of very high inflation, according to the government.

This year, around 100,000 people in Austria will retire. For them, high inflation would have brought a "significant deterioration" for years to come.

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For 2024, current economic forecasts indicate that inflation will again be above average. "For this reason, the aliquot regulation will now be suspended completely for two years. Around 200,000 people who start their pension in the next two years will thus receive the full pension increase - regardless of the month in which they retire," the ministry said.


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