Working in Old Age: Government Wants to Provide Incentives

In the Council of Ministers on Wednesday, a corresponding package is to be put together, which Federal Chancellor Christian Stocker (ÖVP), Vice Chancellor Andreas Babler (SPÖ), and NEOS leader Beate Meinl-Reisinger want to present to the public afterwards. The flat tax has been postponed, instead there will be an allowance of 15,000 euros per year.

The allowance should apply to both self-employed and employed individuals

Originally, a flat tax of 25 percent on additional earnings for retirees was targeted, starting from January 2026. However, this is unlikely to happen for now, instead a fixed allowance is to be introduced. As reported by the "Salzburger Nachrichten" and the "Presse" on Tuesday, the tax relief is not planned to come into effect from January 1, 2026, but rather from January 1, 2027.

According to the reports, the allowance should apply to both self-employed and employed individuals. During the flat tax considerations, there were still disagreements between the ÖVP and SPÖ on this point. The SPÖ wanted the flat tax only for employed individuals. A compromise seems to have been reached on the amount: the ÖVP-affiliated Senior Citizens' Association demanded up to 2,000 euros monthly, while the SPÖ wanted a maximum of 500 to 1,000 euros.

According to the "Standard", the ÖVP might also extend the additional payments to the pension insurance made by people who continue to work in retirement, which have been in place for two years. The SPÖ is pushing to expand the incentive system so that companies also hire people from the age of 60. The NEOS, on the other hand, want a liberalization in the financing of the second pillar in the pension system.

(APA/Red)

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