0
0
The Ministry of Social Affairs has finalized the draft law for introducing a partial pension. From next year, this will enable continued work at a reduced rate while drawing a portion of the pension that has already been saved. To this end, partial retirement will be gradually restricted. In the future, it can only be used for three years instead of the previous five. The corresponding law is expected to pass the National Council before the summer.
At a press conference, Social Affairs Minister Korinna Schumann (SPÖ) expressed her delight that the “really difficult negotiations” due to the complexity of the matter had come to a positive conclusion. What she particularly likes is that, for the first time, it is no longer a case of either pension or work, but that both can be combined. The partial pension is also intended to help people stay in employment for longer.
The Ministry of Social Affairs is also hoping for savings as a pleasant side effect in difficult budgetary times. The partial pension is expected to generate € 197 million in the first year and € 402 million in the second. Around 10,000 people are expected to take advantage of the partial pension. The savings potential for reforming partial retirement is significantly lower. It is expected to save 59 million euros in 2026 and 89 million euros the following year. Last year, almost 36,500 people were in partial retirement.
Regarding the reform itself, the partial pension can be taken as soon as you are entitled to an old-age pension. This means that from the age of 63 for the corridor scheme, from 62 for the long-term insured scheme (previously often referred to as the “Hackler scheme”), from 60 for the heavy worker pension, and from 65 for the old-age pension for men and women, depending on when they join. This is because they are still in the process of aligning with the retirement age for men, which is not until 2033.
Work must be reduced by at least 25 percent and a maximum of 75 percent, with the employer’s consent required. Three corridors have been set up at the request of the shift work sectors. Those who reduce their working hours by 25 to 40 percent will receive an additional 25 percent of the amount saved in their pension account. If working hours are reduced by 41 to 60 percent, 50 percent of the previous credit is paid out in addition to the salary. Anyone who reduces their working hours by 61 to 75 percent, i.e., only has a comparatively low income, receives 75 percent of the entitlement accrued in the account.
It should be noted that in the case of early retirement, the respective deductions reduce the credit. For example, the corridor pension is 5.1 percent per year, and the long-term insurance scheme is 4.2 percent.
An example: A person is entitled to a corridor pension at the age of 63 and wants to take a partial retirement. Up to that point, their account had been credited with 3,000 euros per month from their previous working life. If she now reduces her working hours by 50 percent, 50 percent of the account is closed, and she receives EUR 1,500 minus the deduction of 10.2 percent (for two years)—i.e., EUR 1,347—partial pension. This amount is added to the salary.
If the person then actually retires completely at some point, the retirement pay is composed of the part frozen for the partial pension, plus the part that has remained in the account and continued to grow as a result of gainful employment.
Partial retirement, in which working hours are reduced by 40 to 60 percent and salary compensation is received, is subsequently merged with the partial pension. In the final analysis, this means that in the future, you will no longer be able to reduce your working hours with a five-year subsidy, but only with a three-year subsidy. Specifically, partial retirement will only apply for as long as no partial pension is possible or no pension entitlement exists.
So anyone who is 60 and can take a corridor pension at 63 is then entitled to partial retirement benefits for three years. If the person is not entitled to a corridor pension, for which 42 years of insurance must be proven in the future, they can go into partial retirement for three years from the age of 62. The reduction to three years is gradual. In 2026, there will still be the option of 4.5 years, then four years in 2027 and 3.5 years in 2028.
Following a brief review, the reform is expected to be passed by the National Council during its July plenary session. It is not yet clear whether the sustainability mechanism, which will regulate a response to out-of-control pension costs from 2030, will be ready by then. Schumann said that negotiations were “in the final stages.”
- source: heute.at/picture: pixabay.com
This post has already been read 67 times!
