Pension cuts and new taxes in Austria.
The Austrian government, led by a coalition of the ÖVP, SPÖ, and NEOS parties, intends to implement austerity measures to address the budget deficit, which will significantly impact retirees. As a result of successive economic crises, including the COVID-19 pandemic, the war in Ukraine, and record inflation, the country faces the risk of European austerity measures.
Key measures: Pension cuts: Starting from June 1, 2026, the health insurance contribution for retirees will increase from 5.1% to 6%. New taxes: Taxes will be imposed on electric vehicles, and taxes on tobacco and nicotine products will rise. Tax adjustments: Part of the income tax adjustment related to inflation will be suspended, reducing the benefits recently received by workers.
Budget measures: The government will freeze prescription fees and reduce the cap on drug costs to 1.5% of net income starting in 2026. This program aims to save €6.3 billion in 2025 and €8.7 billion in 2026, but it faces criticism due to its negative impact on pensioners.