Pension adjustment factor at 9.7 percent in 2024

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Pensions are expected to increase by approximately 9.7 percent next year. This is based on average inflation over the last twelve months. This includes the preliminary value for July 2023, so the final inflation adjustment may change. It is based on the average increase in the Consumer Price Index. The Ministry of Social Affairs calculates the reference value based on the inflation rates published each Friday by Statistics Austria.

The arithmetic mean of the twelve annual inflation rates published by Statistics Austria is used for the calculation. This results in a value of 9.7 percent, which is significantly higher than the inflation rate of 5.8 percent from August 2021 to July 2022. Inflation has been steadily declining, from seven percent in July to eight percent in June and 8.9 percent in May. The last time it was above ten percent was in February, when it was 10.9 percent, and the highest was in January, when it was 11.2 percent.

Social Minister Johannes Rauch (Greens) announced on Friday that the government would continue to discuss pension increases in the coming weeks. According to calculations by the Ministry of Social Affairs, the cost of a boost by the statutory adjustment factor of 9.7 percent will amount to around 5.3 billion euros (excluding civil servants’ pensions). Finance Minister Magnus Brunner said on Friday: “As Chancellor Karl Nehammer has already announced, there will be a pension increase by the statutory adjustment value. This increase will ensure that the burden of inflation is cushioned, especially for those receiving low pensions. The details, such as a possible cap on exceptionally high pensions, will be negotiated in the coming weeks.

For the pensioners’ representatives, it is clear: “This value is beyond dispute. Reductions or compensation for various one-off payments are out of the question,” said Peter Kostelka, chairman of the Council of Senior Citizens, in a statement. In addition to the total adjustment value, Kostelka and the president of the Senior Citizens’ Association, Ingrid Korosec, are demanding compensation for the loss of purchasing power over the past two years and the permanent abolition of aliquotation based on the starting month of the pension.

Social and family benefits will also increase by 9.7 percent as of January 1, 2024. “The automatic valorization of social and family benefits is a milestone. In particular, for low-income families, we offer financial security with this increase, Rauch emphasizes. According to the Ministry of Social Affairs calculations, this will cost the federal government around 665 million euros. Family allowances, child deductions, multiple child allowances, childcare allowances, family time bonuses, sickness, rehabilitation, reintegration allowances, retraining allowances, study allowances, and student allowances are all impacted by the alleged “valorization.”

In the coming year, the benefits of the “package against child poverty,” which has already been approved, will remain in force: all recipients of unemployment benefits, unemployment assistance, social assistance, and compensatory allowances, as well as single earners with a gross monthly income of up to 2,000 euros, will receive 60 euros per child per month until the end of 2024.