Austria’s Coalition Slashes Partial-Retirement Spending, Limits Access to Workers With Health Issues
12.06.2026 - 01:52:09 | boerse-global.de
Austria’s three-party governing coalition—the ÖVP, SPÖ and Neos—is pushing through a deep cut to the nation’s partial-retirement programme (Altersteilzeit), trimming annual public outlays from €600?million to €200?million by 2029. Under the revised rules, eligibility would be restricted almost entirely to employees with documented health restrictions.
The move is part of a broader five-billion-euro budget consolidation package for 2027?28, presented on 10?June by Finance Minister Marterbauer. The plan aims to drive the fiscal deficit below 3?% of GDP by 2028, ending the European Union’s excessive?deficit procedure against Austria. Net consolidation stands at €1.5?billion in 2027 and €2.5?billion the following year.
Savings from the partial?retirement overhaul—roughly €250?million a year—help make up for a shortfall in cuts originally planned for the public employment service (AMS). Those AMS savings, worth about €200?million, were supposed to come from measures targeting the so?called “intermediate parking” of workers, but the coalition failed to agree on the details.
Neos social?affairs spokesman Johannes Gasser announced on 11?June that, in essence, only people with health impairments would be able to enter partial retirement from 2026 onward. ÖVP social?affairs spokesman Wöginger floated a new cap on the calculation basis: 75?% of the maximum contribution base, currently around €5,200 a month. The Social Affairs Ministry confirmed the reform plans are broadly set, but the fine print still needs to be hammered out in negotiations.
Opposition parties blasted the proposal during its first reading in the National Council on 11?June. FPÖ leader Herbert Kickl called it a “massive social?policy incision” and accused the government of basing its budget on faulty forecasts that would load burdens, not relief, onto citizens. The Greens argued the cuts hit younger generations while leaving large fortunes untouched. The Chamber of Labour (Arbeiterkammer) also criticised the unequal distribution of the burden.
Finance Minister Marterbauer defended the draft as a responsible piece of fiscal arithmetic. The Austrian Economic Chamber (Wirtschaftskammer) welcomed the accompanying reduction in non?wage labour costs.
Beyond partial retirement, the budget introduces several other labour?market changes. Employees in mini?jobs and part?time roles will have to pay the full unemployment?insurance contribution. At the same time, the government plans to lift the maximum contribution base, increasing social?security revenues.
On the corporate side, Austria will introduce a progressive corporate?income tax on profits exceeding €1?million. The bank levy is being extended and is expected to generate around €300?million annually. Pension adjustments are also pencilled in, though at a rate below the current inflation level.
