Government Sends Pension Changes for Review: This Is What Will Change

On Friday, the first innovations will be sent for review, concerning the corridor pension and the prorating of the first pension adjustment. Additionally, work is being done on a partial pension and a sustainability mechanism. The timeline was presented by the club chairmen of ÖVP and NEOS without the involvement of the Social Democrats. However, this should not indicate a disagreement within the government, all three parties emphasized.

Changes in Pensions: Retirement Age for Corridor Pension Increased

NEOS club chairman Yannick Shetty spoke to journalists about the "biggest pension reform in 20 years." This is necessary to keep the pension system functional, said ÖVP club chairman August Wöginger. People should be kept in the workforce longer. Currently, there are 2.5 million pensioners, and by 2045 there are expected to be approximately 3.25 million. With the pay-as-you-go system - the financing of pensions through the contributions of workers - it would no longer be sufficient, and an additional 30 billion euros would have to be added each year, according to Shetty. This would eliminate leeway for future topics such as education. From January 1, 2026, the earliest possible retirement age for the corridor pension will gradually be raised from 62 to 63 years, and the necessary insurance years from 40 to 42. In quarterly steps, the values will increase by two months until the target is reached. From 2029, the savings are expected to amount to one billion euros per year.

Partial Pension Coming from 2026

Although not yet sent for review, the partial pension is to be decided in the National Council in July and also enabled at the beginning of 2026. If one has claims to an early retirement type, they will have the option to take, for example, 50 percent of the pension and continue working at 50 percent, explained Wöginger. "Overall, this should add up to 100 percent." The part-time retirement remains but will be integrated into the partial pension model, said Social Minister Korinna Schumann (SPÖ) in the Ö1 "Midday Journal." The partial pension is a "win-win situation" for both people and the tax and pension system, said the ÖVP club chairman. A 63-year-old man who earns 4,000 euros gross and chooses the partial pension would - based on a reduction in working hours by half - earn around 350 euros more than in the corridor pension. The pension from the statutory retirement age of 65 would also be higher.

Sustainability Mechanism to Obligate Future Government on Pensions

For Shetty, the legal sustainability mechanism, which the government also wants to decide this year, is the most important point. If it is not possible to meet certain goals with the steps taken - these are yet to be defined - further measures for the pension system must mandatorily follow. A future government will receive a "bundle of measures from which it can choose," said Shetty, mentioning, for example, new adjustments to the corridor pension. Rather than a reduction in pension benefits, NEOS would prefer a movement in the retirement age, he said. If the regulation could be passed as a constitutional provision - with the help of the Greens or the FPÖ - they would do so. However, the two opposition parties waved it off in response to Ö1.

In addition, the aliquoting - the adjustment of pensions in the first year - is to be 50 percent from 2026, regardless of the month of commencement. As of June 1, the increase in health insurance contributions for pensioners from 5.1 to 6 percent is also to come into effect. The Ministry of Social Affairs also told the APA that they are aware that savings are needed. A spokeswoman pointed to cushioning measures for hardship cases - such as freezing the prescription fee in 2026. Furthermore, the government wants to create an incentive and monitoring system for the employment of people over 60. "Wage cost-reducing elements" are to be used more specifically, according to Wöginger. The monitoring is intended to determine in which sectors how many people over 60 are employed.

Absence of SPÖ at Background Discussion on Pensions "No Foul" Within the Coalition

Schumann emphasized to Ö1 that there will be "no intervention in the pension account, continued pension increases, and no raising of the retirement age to 67." She still considers the coalition's pension reform to be a "significant step." Noticeable at the background discussion was the absence of the Minister of Social Affairs and the SPÖ in general. This is not an expression of discord, the club chairmen emphasized, everything was coordinated by the three-party coalition. Shetty admitted that the format raises questions but at the same time reminded that a first measure in the pension sector - the inclusion of caregivers in heavy labor - was recently presented without the NEOS. The Ministry of Social Affairs told the APA that they would have liked to present the innovations only when they are ready for decision. However, there were scheduling problems, and it is "no foul" by the coalition partners.

Praise for Partial Pension, Rest of the Reform Causes Criticism

The Green social spokesperson Markus Koza considers measures to encourage companies to employ older people necessary instead of raising the retirement age for the corridor pension. He has little regard for a sustainability mechanism in constitutional rank, as constitutional majorities are there to "decide the foundations of our state system." The Greens, however, view the partial pension positively.

The FPÖ is dissatisfied, once again bringing the asylum debate into play. "The system parties, which have brought us the budget catastrophe and the gigantic mountain of debt in the first place, are now brushing off current and future pensioners while allowing illegal immigrants to flow unchecked into the social hammock at taxpayers' expense under the asylum guise," said party leader Herbert Kickl in a statement. Social spokesperson Dagmar Belakowitsch also expressed disapproval to Ö1. However, the FPÖ could also imagine agreeing to the partial pension.

The president of the ÖVP Senior Citizens' Association, Ingrid Korosec, welcomed the planned partial pension and can understand the gradual tightening of the corridor pension. However, she called for the involvement of senior representatives in the concrete design of the reforms and age-appropriate workplaces. Sharper words came from the SPÖ-affiliated Pensioners' Association. Interim President Helmut Bieler called the changes, coupled with the savings measures of the Austrian Health Insurance Fund (ÖGK), "existence-threatening, especially for minimum pensioners." The sustainability mechanism is "a blank check for any kind of pension cuts." He also welcomed the partial pension.

(APA/Red)

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