Pensions: Only Up to 2,500 Euros Will Inflation Be Fully Compensated

For amounts above this, there is a fixed amount of 67.50 euros. On average, the adjustment will be 2.25 percent. The senior representatives have already rejected this coalition compromise in advance. They wanted inflation compensation for all retirement benefits. In addition to the Chamber of Labor and the ÖGB, the Greens also welcomed this social gradation. In contrast, Fiscal Council Chief Christoph Badelt and the former head of the Pension Commission Walter Pöltner are against it.

With the full inflation adjustment for low pensions and a fixed amount for those above, "the most essential demands of the Greens have been implemented," commented the Green labor and social spokesperson Markus Koza. Recipients of small and medium pensions - mostly women - have already had to make a significant contribution to budget consolidation: "Those people would have been particularly painfully affected by further cuts. (...) This was the least - and actually also the most obvious - that had to be expected from this government." However, Koza stated that these savings measures have nothing to do with a contribution from the "strong shoulders" to budget consolidation. "The contributions promised by (SPÖ Vice Chancellor Andreas, note) Babler from millionaire heirs and digital corporations are still missing."

Increase Acceptable for AK, IV: "Right Step"

In view of the budgetary situation, Chamber of Labor President Renate Anderl considers the pension increase acceptable. "The majority of pensioners receive the full increase of 2.7 percent, which is good, especially for women." However, Monika Kemperle, the federal pensioners' chairwoman of the ÖGB, sees "a lot of room for improvement." Although the gradation has not additionally burdened those with low pensions, "we are far from satisfied. A general adjustment below the inflation rate would have been a slap in the face for pensioners."

For the Federation of Austrian Industries, the average increase in pensions below the adjustment factor of 2.7 percent is a right step. Moreover, further structural reforms are needed, including "of course the discussion about the statutory retirement age and the restriction of early retirements," according to a statement.

Social Minister Korinna Schumann (SPÖ) emphasized that 71 percent of pensioners will be fully compensated for inflation. Therefore, she sees a "fair" solution. The department head regrets that no amicable solution was reached with the pensioners' representatives: "I am sorry that we cannot fulfill the wishes," Schumann referred to the difficult budgetary situation. However, there was an appreciative exchange. She does not believe in a permanent rift regarding negotiations in other areas.

Signal for Wage Negotiations

ÖVP parliamentary group leader August Wöginger sees a fair conclusion. He pointed out that despite the base amount, a pensioner with 3,000 euros still receives more in absolute terms than one with 2,000, and therefore sees the gradation as justified. Wöginger did not want to speak of a direct hint towards civil servant negotiations upon request. However, he believes that given the overall situation, a moderate approach has been shown towards future agreements as well.

The pact can be seen as a success for NEOS social spokesperson Johannes Gasser. He emphasized that over the legislative period, 1.4 billion euros would be gained for budget relief through the lower conclusion. This year, costs are expected to be 350 million less than would have been the case with full inflation compensation. Overall, the adjustment for 2026 still costs 1.73 billion euros. For the future, Gasser wants the total pension income to serve as the basis for adjustment, meaning different benefits are added together.

Cutbacks on Luxury Pensions

This could lead to cutbacks on luxury pensions. For an implementation that also includes special pensions of the states, a constitutional regulation would be necessary here. Gasser sees the opposition as being required to participate. The specific issue: If someone has a pension of 3,000 euros, it will be increased by the fixed amount next year. However, if the person also receives a second lower pension (such as a widow's pension or from a secondary employment), the inflation adjustment will be fully applied to this. If the two were added together, the total benefit would only be increased by the fixed amount.

The coalition negotiators did not provide a specific reason why the limit was set at 2,500 euros this year. However, Wöginger emphasized that the limit is above both the median and the average pension (1,704 and 1,840 euros total 2,297 and 2,238 euros for men).

The senior representatives are not in agreement with the solution presented on Friday, as they made clear the day before. The president of the SPÖ-affiliated Pensioners' Association, Birgit Gerstorfer, said after the presentation on Friday that they had "prevented the worst." The 2.7 percent up to 2,500 euros is at least a "partial success." However, one should not get used to increases below the statutory adjustment factor: "If the government thinks it can try the same thing again next year, it must expect tens of thousands of pensioners across Austria to take to the streets," said Gerstorfer.

Senior Citizens' Association Chairwoman Ingrid Korosec (ÖVP) stated that without the massive pressure from the pensioners' representatives, the result would have been significantly worse. However, the renewed tiering of the adjustment contradicts the insurance principle and increasingly undermines it: "Those who have paid in more throughout their lives should not be disadvantaged in retirement." The Senior Citizens' Association leader also criticized the handling of the interest groups. They were only involved at the last minute.

Pensions: Social Tiering "Not Social" for Badelt and Pöltner

The federal government has agreed on the pension adjustment for the coming year. Only pensions up to 2,500 euros will have inflation fully compensated, while benefits above that will receive a fixed amount of 67.50 euros. This social tiering must be abandoned, said Fiscal Council President Christoph Badelt in the Ö1 "Morning Journal." The former head of the Pension Commission, Walter Pöltner, even called it "populist" and "not social."

"It is always overlooked that pensions are not a social benefit, but an insurance benefit," said Pöltner in an interview with the "Salzburger Nachrichten" (Friday edition). Those who have paid in a lot receive a higher pension - those who have paid in little receive less. "So if you give those who have paid in a lot less of an increase than those who have paid in nothing or little, then that clearly contradicts the insurance principle. And that is unfair."

Badelt argued similarly. Those who have paid in more would be "punished" by the tiering. In the specific case, keyword budget consolidation, even "small wheels" must be turned, which is why tiering is reasonable, but in the long term, it should be abandoned. For the Fiscal Council President, an increase in the statutory retirement age is "an absolute must."

(APA/Red)

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