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With the presentation of the 2025/26 double budget by Finance Minister Markus Marterbauer (SPÖ), the whole truth about the government’s planned billion-euro austerity measures to restructure the state coffers is on the table.
The corresponding laws are now coming. A first package was already passed in March, including the abolition of educational leave and the VAT exemption for solar installations, as well as the increase in tobacco tax and the bank levy. A second legislative package will be passed in the National Council next Thursday, May 22.
This “Budget Restructuring Measures Act II” focuses on increasing the federal fees for passports etc. as well as the increased health insurance contributions for pensioners. The measures enshrined in the law are expected to generate additional revenue of EUR 760 million for the budget by 2029. At the same time, relief amounting to 20 million euros is planned.
State fees for applications, documents, and official acts are to increase. The adjustment is based on inflation since the last major change in 2011 or 2018. For most fees, this revalorization means an increase of 48.2%.
In the future, a passport will cost 112 euros instead of 75.90 euros. The fee for issuing a driving license will rise from 60.50 euros to 90 euros. Fees increased in 2018 (for citizenship or certain residence permits) and are set to rise by 29.8%.
Most of these fee increases are set to come into force on July 1, 2025.
In financial terms, the Ministry of Finance expects additional revenue of EUR 65 million in 2025 and EUR 150 million in subsequent years.
Health insurance contributions for pensioners will be increased from 5.1% to 6%. Depending on the amount of their pension, they will lose several hundred euros a year as a result.
This increase will apply from June 1, 2025.
To compensate for pensioners’ higher health insurance contributions, the maximum social insurance refund is to be increased to EUR 710. This should already be possible from the tax return or employee assessment for 2025.
Further cushioning for pensioners is to be provided by freezing the prescription fee; it is not to be increased in 2026. In addition, the upper limit for prescription charges – i.e., the maximum amount that must be paid per year – will also include low-cost medicines (which cost less than the prescription charge) in the future.
The upper limit for prescription charges was previously 2% of annual net income (excluding special payments). It will now gradually be reduced to 1.5% from 2027 to 2030.
The additional revenue from the increase in contributions will be used to finance health insurance.
There will be tax changes for private foundations. Among other things, the interim tax on certain foundation income will increase from the current 23% to 27.5% from the 2026 assessment year. The legislative package also includes changes to the Real Estate Transfer Tax Act—this concerns the foundation income tax equivalent, which will increase from 2.5% to 3.5% from January 1, 2026.
The regulation that coronavirus vaccinations can be carried out free of charge by doctors in private practice is to be extended until March 31, 2027. Health insurance companies are to continue to pay a fee of 15 euros per vaccination. In addition, pharmacies are to receive 5 euros per vaccination dose dispensed.
The expected costs are 6 million euros for three quarters in 2025, 8 million euros in 2026, and 2 million euros for the first quarter of 2027.
The retention periods for personal data at the Public Employment Service Austria (AMS) are to be clarified. According to the draft law, data for the calculation of cash benefits may be stored for up to ten years after retirement age. Data collected primarily for support and placement purposes must be deleted no later than seven years after the end of the process.
Another change concerns financial reserves saved in the past, for example, through unused budget funds or surpluses from previous years. The plan for 2025 is to transfer EUR 25 million from these AMS reserves to the labor market reserve. This should give the AMS more leeway for financing subsidies and running costs in 2026.
The changes to the AMS are due to come into force on June 1, 2025.
- source:heute.at/picture: Image by Wilfried Pohnke from Pixabay
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