Employment, Unemployment, and Pension Benefits
As of the early 1990s, the standard work week in Austria was
forty hours, although some occupational groups have negotiated a
thirty-eight and one-half hour week. Minimum wages and salaries
are negotiated by trade unions and the representative bodies of
employers, and individual professional groups negotiate increases
in wages, salaries, or benefits on the basis of collective
bargaining. Salaries are paid fourteen times a year, and two
special payments, usually on June 1 and December 1, are taxed at
lower rates than regular salaries. In addition, Austrians are
entitled to five weeks of paid vacation annually.
All people gainfully employed, employees as well as the selfemployed , are subject to compulsory insurance, which includes
unemployment, disability, retirement, and provisions for
surviving dependents. The right to draw unemployment is
contingent on having worked for at least one year. Unemployment
benefits range from 50 to 70 percent of the recipient's previous
net pay and are limited to a period of seven months. After this
period expires, the unemployed can qualify for a series of
different support programs depending on need.
As of the early 1990s, the legal retirement age was sixtyfive years for men and sixty years for women. However, only 10
percent of men and 50 percent of women actually work until those
ages because they may qualify for disability pensions or take
advantage of provisions that allow contributors to retire after
paying into a pension fund for thirty-five years. Retirement
pensions are generally calculated on the basis of the level of
income during the last ten years of payment and the overall
length of the period of contribution. For example, if a person's
"full working life" is forty-five years, he or she receives a
pension equivalent to about 80 percent of his or her previous net
income, which is adjusted on a regular basis to compensate for
subsequent increases in the cost of living. A widow receives 60
percent of her late husband's pension.
More than two-thirds of the expenditures for pensions are
directly covered by payments of employers and employees into
pension funds, and the balance is funded by the federal budget.
However, given Austria's liberal early retirement practices and
demographic trends, the ratio between the active work force and
retired persons in Austria is deteriorating and could reach 1:1
by the year 2020. Because of this trend, experts recognize that a
reform of the pension system is inevitable, and the financing of
social security benefits, which were introduced under fortuitous
conditions of economic and demographic growth in the 1960s and
1970s, is becoming an increasingly pressing issue. A reduction of
the level of benefits or the introduction of a "flat-rate"
pension, which does not take previous salary and contribution
differentials into account, are two possible alternatives.
Data as of December 1993