Austria and Germany implement social and fiscal reforms

Austria and Germany are implementing various social and fiscal reforms affecting military service, pensions, and family support.

In Austria, the government is proposing a military service reform that would extend mandatory service to nine months. If recruitment numbers fall below a specific threshold, civil service could be extended from nine to 11 months. Additionally, a new “Active Retirement” model planned for 2027 will offer tax exemptions and social security relief for retirees who continue to work. However, families face financial challenges as central benefits like family allowance and childcare subsidies remain frozen against inflation, and new rules for the “Family Bonus Plus” will mandate different distribution methods between parents.

In Germany, the government is pursuing austerity measures. Proposed reforms to parental allowance (Elterngeld) aim to save approximately 500 million euros by reducing the maximum duration from 14 to 12 months. In Dachau, local authorities are considering a 20 percent increase in childcare fees. Meanwhile, legislative discussions are underway regarding the calculation methods for social security benefits (Bürgergeld) for 2027, and political opposition in Bremen has criticized the state's ongoing budgetary instability.