“Not dramatic” – pensions – government spending skyrockets

Federal funds are up 64.9 percent
The federal funds (including compensatory payments) for statutory pension insurance will grow from EUR 12.8 billion this year to EUR 21.2 billion in 2027. That means an increase of 64.9 percent. Of this, EUR 1.075 billion is attributable to compensatory allowances and this amount will increase slightly by 2027.

In addition, there is the pension expenditure for civil servants, which will increase by 3.4 billion euros or 25.6 percent from 13.3 billion euros this year to 16.7 billion euros in 2027. Measured in terms of GDP, however, this only results in a slight increase (from 2.95 to 2.97 percent). Because there are fewer and fewer civil servants due to the limited pragmatisation, the income from premiums is also falling. On the other hand, however, expenditure is increasing – on the one hand due to higher pension adjustments due to inflation and on the other hand because the number of pensioners will increase by approximately 6,200 people in 2027 to 314,700. This is according to a report available from the APA.

Higher pensions in 2027
According to this, the income from contributions does not increase as much as the expenditure in the statutory pension insurance. On the one hand because of a “relatively poor employment development” according to forecasts and on the other hand because more and more people are retiring. However, the peak of the wave of “baby boomers” retiring coincides with the phase of raising the statutory retirement age for women, which will moderate new entrants from 2024 onwards. The number of pensions falling to 1,000 compulsory insurance policies will also fall from 579 this year to 571 in 2027. Another important factor is pension adjustments, which will be significantly higher based on inflation forecasts. Last but not least, an increase in the average pension amount is expected from approximately EUR 1318 this year to approximately EUR 1774 in 2027.

However, Ingrid Korosec, deputy chairman of the elderly care committee, does not think the numbers are too dramatic: “It seems more threatening than it is.” there will also decrease. In addition, the KV degrees with the high inflation and the resulting increase in premium income are not fully reflected. In principle, the committee can reject the report, decide on it or formulate recommendations to the government. Korosec considers the latter as a possible variant.

Kostelka thinks the numbers are “worth questioning”
The chairman of the Association of Pensioners SPÖ, Peter Kostelka, took a similar position. He considers the numbers “worth questioning” and opposed an annual “number alarmism”. In his opinion, premium income from pension insurances is “represented far too little” in the report. Real wage and salary increases indicated significantly higher earnings. He will therefore “draw attention to this and question the expert opinion figures” at the meeting of the old-age pension committee, Kostelka announced.

“The pension system is and will remain stable, as shown by the long-term reports at national level and also by the EU Aging Report. We should not constantly paint the devil on the wall,” said the president of the pensioners’ association. The secretary general of the Federation of Industry, Christoph Neumayer, on the other hand, called for urgent reforms in view of “explosive costs”.