Austria’s Parliament passed a modest yet impactful pension reform Thursday, introducing a new part-time pension scheme set to take effect in 2026, reported by the Austrian News Agency. The plan allows older workers to reduce their working hours while drawing partial retirement benefits — a move aimed at keeping people employed longer without forcing full-time work.
To qualify, workers must already be eligible for a full pension and agree to cut their hours by 25% to 75%, with employer approval. In exchange, the government will gradually restrict the current “partial retirement” program, shortening eligibility from five to three years and temporarily lowering state wage compensation from 90% to 80% between 2026 and 2028.
Social Affairs Minister Korinna Schumann (SPÖ) hailed the reform as a path toward more flexible retirements, assuring Austrians that public pensions remain safe. A newly introduced “sustainability mechanism” will monitor pension system spending through 2030. If costs exceed targets, automatic measures — like raising the early retirement age or increasing contributions — will be triggered.
While the ÖVP and NEOS supported the law, praising it as a step toward modernizing the system, opposition parties were divided. The FPÖ flatly rejected the package, warning it opens the door to pushing the retirement age toward 70. The Greens backed the part-time pension but opposed cuts to existing programs and voted against the overall reform.
Despite the political fault lines, the law marks the first structural shift in Austria’s pension system in over two decades.
