New partial pension: Government plans comprehensive pension reform from 2026!

New partial pension: Government plans comprehensive pension reform from 2026!

The Austrian government has approved a comprehensive pension package that aims to sustainably reform the pension system. The changes are expected to be passed in the National Council in July and will come into force on January 1, 2026. The key points of the package are the introduction of a partial pension and a sustainability mechanism to limit pension expenditure. This was reported by [vienna.at].

The new partial pension enables those entitled to reduce their working hours by between 25 and 75 percent and at the same time receive part of the pension they have already saved. The prerequisite is a regular entitlement to a retirement pension. The existing partial retirement will be transferred to the new model, whereby the state-funded reduction is only possible for a maximum of three years if there is no entitlement to partial retirement.

Focus on older workers

A central goal of the pension package is to keep older employees in employment for as long as possible and to relieve their financial burden. Social Affairs Minister Korinna Schumann announced that the statutory retirement age will not be increased and that no pension cuts are planned. The statutory retirement age remains at 65, while the actual retirement age for men is 62.3 years and for women 60.2 years. The federal government is also planning incentives for companies to continue to employ older workers over the age of 60 and to expand age-appropriate jobs. In addition, health measures are planned in the workplace to promote the well-being of the older workforce, according to heute.at.

Another important component of the reform package is the announced sustainability mechanism, which is due to come into force from 2030. This provides for a statutory spending cap for the pension system. The government must take action if pension spending exceeds established budget paths. In the event of such an excess, a catalog of measures is required that should correspond to savings of around 2.5 billion euros.

Changes to unemployment benefits

In addition to pension reforms, the government is also making changes to unemployment benefits. From 2026 onwards, there will hardly be any additional opportunities for additional income while receiving AMS money; most regulations will only apply in exceptional cases. In addition, a tax improvement is planned for working pensioners, with a flat-rate final tax of 25 percent for income in old age. The impact of these new regulations will be carefully monitored to address labor market challenges, and a monitoring system will be introduced for people over 60 years of age to regularly evaluate their employment situation, as set out in parlament.gv.at.

In summary, it can be said that the new regulations represent a significant step towards sustainable and fair pension provision. Incentives for older workers and a focus on reducing paid work during the transition period attempt to keep the pension system stable in the long term while addressing financial challenges.