Starting in 2026, employees in Austria will be able to reduce their working hours while drawing part of their pension thanks to a new “partial pension” scheme. But how exactly does it work and who can benefit?
The partial pension (Teilpension) allows eligible workers to ease into retirement by cutting back on hours and receiving a portion of their pension at the same time. The model, which applies from January 1st, 2026, is aimed at those who want a smoother transition out of the workforce without sacrificing too much income.
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Who can access a partial pension?
You can apply for a partial pension if you already qualify for a recognised form of retirement pension and reduce your working hours by at least 25 percent (subject to employer approval).
Eligibility depends on the type of pension and your age. People entitled to the Korridorpension can access the scheme from the age of 62, gradually rising to 63 from 2026. Those with a long-term insured pension can also start from age 62. If you qualify for a severe work pension, you may begin as early as age 60. For the standard old-age pension, the threshold is 61 for women (rising gradually) and 65 for men.
Applications must be submitted to the relevant pension insurance provider, typically the Pensionsversicherungsanstalt (PVA).
What are the partial pension models?
There are three options depending on how much you reduce your working hours. If you cut back by 25 to 40 percent, you receive 25 percent of your pension alongside your reduced salary. A 41 to 60 percent reduction grants 50 percent of your pension. Those reducing hours by 61 to 75 percent can draw 75 percent of their pension.
Your employer must agree to the reduced working hours, and the pension share is calculated accordingly.
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How much money do you actually get?
Suppose an employee entitled to a Korridorpension chooses to reduce working hours by 50 percent. They earn €3,500 gross monthly and would receive a €2,700 gross pension at age 63.
During partial retirement, they would receive half of their salary (€1,750 gross) plus half of the pension (€1,350 gross), for a total gross income of €3,100. The resulting net income is €2,369.32, just €83.79 less than their full-time net salary.
After two years, if they retire fully, their monthly pension rises to €3,073.45 gross. That’s over 10 percent more than if they had taken full retirement at 63 without the partial pension option.
What are the benefits of a partial pension?
Partial retirement allows you to stay officially employed, maintain social security contributions, and continue building your pension entitlement.
The model provides more personal time without a dramatic drop in income, making it a flexible and financially sound option for those winding down from full-time work.
What happens to your pension account?
At the beginning of the partial pension period, your pension account is “closed” for the corresponding share (25, 50, or 75 percent), and your partial pension is calculated from that amount. The remaining portion of the account continues to grow while you are still employed. When you eventually claim your full pension, the rest of the account is closed and included in your final benefit calculation.
Can you apply if you were unemployed the year before?
Yes, partial retirement is still possible even if you were unemployed in the previous year. In this case, your former working hours are assumed to be 38.5 hours per week, the standard in Austria.
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How do you apply?
You must apply through your pension insurance provider, usually the PVA. You will also need to agree the reduced working hours with your employer in advance, so it’s best to begin discussions early if you’re approaching retirement eligibility.
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