Pension reform hits waves: What would come to Austria in 2026!

Pension reform hits waves: What would come to Austria in 2026!

According to the SPÖ election success in Vienna, strategic opportunities open up for the federal government to tackle pension reforms. By 2027 there are no significant elections, which gives the coalition time to develop concrete measures. However, the party would like to wait until after the celebrations on May 1st with reform debates so as not to disturb the festive character. This leads to a tense situation, since the SPÖ is faced with an election result of almost 40 percent in Vienna, while at the same time there is urgency in the reforms.

From June 1, 2025, the increase in health insurance contributions from 5.1 percent will be effective to 6 percent. In addition, the government plans to raise the starting age for the corridor pension from 62 to 63 years and to increase the necessary insurance years from 40 to 42. These changes are part of a comprehensive reform package that is to be presented in the budget speech on May 13th.

planned measures and socio -political criticism

The planned reform package also provides for the introduction of a sustainability mechanism that adjusts the number of insurance years required from January 1, 2035 if the pension expenses exceed the budget. In addition, a partial board will be introduced and nursing staff should be included in the heavy worker regulation from 2026, which enables them to retire earlier.

Economic research institutes such as WIFO warn of rising pension expenses that could increase by almost 3 billion euros by 2031 if there are no structural reforms. Therefore, the planned measures are not only motivated, but also urgently necessary to ensure the financial stability of the pension system.

employee representatives, in particular the GPA union, criticize the planned tightening as "socially unbalanced" and require additional measures to support older workers and protective mechanisms against poverty in old age. It remains unclear whether the government will respond to these concerns or whether the reform pressure will predominate.

changes in the corridor pension

As part of the reform, significant effects on those affected could have occurred. According to the pension insurance (PVA), around 10,720 people in corridor pension went in 2024, of which around 6,382 people would be directly affected by the desired innovation. This reform could generate savings of around 270 million euros annually, which is considered low in relation to the entire federal pension expenditure, since these are around 30 billion euros in the 2024 budget.

In addition, the reform in full expansion, even if women are affected, is expected to enable savings of around 600 to 700 million euros per year in the pension system. These measures are part of a wider plan to achieve the aim of the Austrian government over 18 billion euros in the next seven years. A savings package already adopted in the National Council includes tax expansion and cuts in grants to achieve the consolidation goals.

Detailed reports and studies on the pension system, in particular on the condition and the requirements of the statutory pension insurance, were published by . These offer citizens deeper insights into the mechanisms of the pension system and the planned changes for the coming years.