Austria’s pension system is set for significant reforms starting next year. On Friday, the first changes—affecting corridor retirement and pension adjustment rules—entered the public review process. Additional reforms, including the introduction of a partial pension and a sustainability mechanism, are in the works. The legislative roadmap was presented by the ÖVP and NEOS parliamentary leaders without the Social Democrats, though all parties denied any rift within the coalition.
NEOS parliamentary leader Yannick Shetty described the plan as “the biggest pension reform in 20 years,” emphasizing the need to keep the system viable as the number of retirees grows—from 2.5 million today to an estimated 3.25 million by 2045. Shetty warned that without reform, Austria would need to inject 30 billion euros annually into the system, crowding out investments in future priorities like education.
Corridor Retirement Age Increases, Partial Pension to Launch in 2026
Starting January 1, 2026, the earliest eligibility age for corridor retirement will gradually rise from 62 to 63 years, and required contribution years will increase from 40 to 42. The increments will be applied quarterly until the targets are met. These measures are expected to save 1 billion euros annually by 2029.
A new partial pension scheme will also be introduced in 2026. People eligible for early retirement will be able to take, for example, 50 percent of their pension while continuing to work part-time. The existing phased retirement program will be integrated into this model. According to Social Minister Korinna Schumann, the partial pension is a win-win—benefiting both retirees and the public pension system.
For instance, a 63-year-old man earning 4,000 euros gross could earn 350 euros more under the partial pension than through full corridor retirement, and his full pension at age 65 would be higher.
Sustainability Mechanism and Pension Adjustment Changes
Shetty emphasized the importance of a legally binding sustainability mechanism. If future targets are missed, further reforms would be triggered automatically. These could include adjustments to retirement age, which NEOS prefers over pension cuts. A constitutional amendment for this mechanism is being considered, though opposition parties currently reject it.
Starting in 2026, pension adjustments in the first year of retirement will be set at 50 percent regardless of the month of retirement. Additionally, health insurance contributions for pensioners will increase from 5.1 to 6 percent starting June 1. The government also plans a new incentive and monitoring system to promote employment among people over 60.
No Coalition Rift, Say Parties
Despite the SPÖ’s absence at the reform presentation, ÖVP and NEOS emphasized coalition unity. Minister Schumann stated that there would be no changes to individual pension accounts, no cancellation of annual pension increases, and no hike in the retirement age to 67. She described the reform as an “essential step.”
Reactions: Praise for Partial Pension, Criticism for Other Reforms
Green Party social policy spokesperson Markus Koza welcomed the partial pension but criticized raising the corridor retirement age. He also opposed enshrining the sustainability mechanism in the constitution.
The FPÖ rejected most reforms, accusing the government of targeting retirees while ignoring immigration concerns. However, they expressed openness to the partial pension.
ÖVP Seniors’ Association president Ingrid Korosec supported the partial pension and the corridor changes but called for senior representatives to be included in the reform process. The SPÖ-aligned Pensioners’ Association, meanwhile, warned that combined with healthcare cuts, the reforms could endanger low-income retirees. They also welcomed the partial pension but criticized the sustainability mechanism as a “free pass for pension cuts.”
