The demographic change requires answers. The government has therefore announced a regulation that should motivate the Austrians to work longer and therefore also in retirement. What does the solution approach look like? A uniform income tax of 25 percent has been announced and must apply from January 1, 2026.
One could save 2.4 billion euros from the government budget if the average retirement age would increase from currently 61 to 62. “We have to look honestly,” says Doris Hummer, president of the Upper Austria Chamber of Commerce, who is strong for people who work longer in the country. Already in the autumn of 2024 she had made it clear that the development was alarming: “With part -time work and early retirement, we are in the top field. At the same time, the labor solution population is shrinking. That cannot go out,” she said in October, when she appealed to the location under the motto “a year more about securing work and specialists.
“No excessive approaches”
“These are not excessive approaches if we say that the average retirement age should go to 65 and not stop at 61,” says Hummer today. Nache: “If you bring the average retirement age to 65, that is a lot of money released for innovations, education, childcare and the like.”
“The labor market also remains one of our biggest bottlenecks à la Longue. You have to think about all these structural reforms that hopefully now succeed,” the company representative emphasizes. The demographic change focuses on the elderly, their workforce will become more important.
According to Hummer, an important lever is therefore also the flat tax announced by the government, which must be introduced on January 1, 2026. This makes the extra income more attractive and clearer for pensioners. “The government agreement is aimed at people older than 65 who are in the control sign and still go to work there – they have to pay 25%,” says Hummer. The regulation therefore ensures a uniform income tax on the extra income in the pension.
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.
