Austria introduces 'Aktivpension' tax incentives for retirees

The Austrian government is moving forward with the introduction of 'Aktivpension,' a policy designed to incentivize retirees to continue working. Starting in 2027, up to 15,000 euros in annual income from active employment will be tax-free for pensioners, and individuals will no longer be required to pay their own pension insurance contributions, though employer contributions will remain.

Economic Minister Wolfgang Hattmannsdorfer defended the measure against criticism from the Momentum Institute, which argued that higher-income pensioners benefit more in absolute terms due to their marginal tax rates. Hattmannsdorfer stated that the goal is to provide financial incentives for those who voluntarily extend their working lives to address labor shortages caused by aging demographics.

The Freedom Party (FPÖ) has announced its opposition to the current framework. Party representatives, including Dagmar Belakowitsch, criticized the plan for potentially disadvantaging heavy laborers and those who retired early under existing regulations. The FPÖ intends to submit amendments to ensure the tax exemption is calculated annually rather than monthly and to allow men to access the benefit regardless of whether they have reached age 65, provided they meet insurance requirements.