Debt advice has undergone a real boom in the past year. Rising costs of living and housing, as well as unemployment and loss of income, caused almost 22,000 people to contact debt advice for the first time in 2023. Compared to 2022, there is an increase of almost 17 percent, explains the director of the umbrella organization for state-recognized debt advice in Austria, Clemens Mitterlehner.
The main reasons for debt are still lower incomes and unemployment. “But especially if we compare 2022 with 2023, we see that more and more people are struggling with inflation. Now one in eight people who come to debt counseling say that this is the main reason why they can no longer afford it,” said Mitterlehner in a conversation with Jürgen Winterleitner. It is also notable that women are hit even harder: “Here, more than 14 percent say inflation is the main reason for over-indebtedness.”
In terms of social policy relief, there are many measures with many details, said Mitterlehner, who mentioned a few examples in the interview. The family allowance plus is designed in such a way that the full family allowance only benefits people who have a relatively good income. “If it is actually supposed to be a family-promoting measure, that is exactly the wrong direction. Those who do not need it as urgently as others are supported.”
A second major problem is unemployment, which has always been a major problem in debt advice: “We see that with the net replacement rate of 55 percent, many people receive a financial shock when they become unemployed. So if I were to ask you now that you would have 55 percent of your income in one fell swoop, you would also wonder how it would all turn out.” A possible solution suggestion: “We have been demanding this net replacement rate for some time. has been increased to 70 percent at other institutions for a long time to prevent this financial shock from becoming too great.”
Long-term unemployed ‘won’t find a job anyway’
Mitterlehner is skeptical about the tax incentives that Chancellor Karl Nehammer (ÖVP) presented with the Austrian plan, such as a full-time bonus and incentives for full-time work. “These measures can work for a certain population group, namely people who have reasonably good prospects on the labor market. The major problem on the labor market is the long-term unemployed.
“No matter how many ‘motivating factors’ there are, they will somehow not find a job because, for example, they have health problems, because they have a poor education, because they have a bad linguistic hand in the labor market.” According to Mittlerlehner, you These people teach you how to be frugal with money. “So it is not the case that they should be put in a drawer, so to speak, and told that it is all their own fault.”
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Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
