Austria: Government Advances Tax Break for Working Pensioners
Austria is moving ahead with a new tax incentive designed to encourage people to continue working after reaching the statutory pension age.
The country’s parliamentary Social Affairs Committee has approved legislation for an “Aktivitätsfreibetrag”, which would provide eligible working pensioners with a tax allowance of up to €15,000 per year, or €1,250 per month. The measure is currently planned to take effect from January 1, 2027, although it still requires approval by the National Council.
The proposal is aimed at keeping experienced workers in the labour market for longer and encouraging employment among people who have already reached pension age. The government hopes the measure could help address labour shortages while also giving older workers a financial incentive to remain employed.
Austria is also continuing to expand its digital public services. Almost 6.3 million ID Austria registrations had been completed by September 1, according to the Federal Chancellery. Authorities want more municipalities to become registration centres so that citizens and eligible residents can access digital government services more easily.
The government is simultaneously working on changes to family-benefit rules affecting displaced Ukrainians and people with subsidiary protection. Austria’s Parliament has begun considering the proposed changes, including provisions that would apply retrospectively to some Ukrainian families from July 1.
The pension-tax proposal reflects Austria’s broader effort to respond to demographic changes, labour shortages and pressure on public finances while encouraging greater participation in the workforce.
