Austria is implementing a series of financial adjustments impacting pensions, healthcare and fees, with many changes taking effect in , and further adjustments planned through and beyond. These measures, outlined in the 2025/26 double budget presented by Finance Minister Markus Marterbauer, aim to restructure state coffers and generate additional revenue.
Increased Fees for Official Services
A significant portion of the restructuring involves increasing fees for state services, including passports and driving licenses. These adjustments are based on inflation since the last major fee revisions in and . Most fees will see an increase of 48.2%. A passport, for example, will rise in price from €75.90 to €112. The cost of issuing a driving license will increase from €60.50 to €90. Fees that were previously increased in – such as those for citizenship or certain residence permits – will be adjusted upwards by 29.8%.
The Ministry of Finance anticipates these fee increases will generate an additional €65 million in revenue in , rising to €150 million in subsequent years. This revenue is intended to contribute to the overall budget restructuring efforts.
Healthcare Contribution Increases for Pensioners
Pensioners will face an increase in their health insurance contributions, rising from 5.1% to 6% starting . This change is expected to result in a reduction of several hundred euros per year for pensioners, depending on the amount of their pension. The increased revenue from these contributions will be allocated to financing health insurance.
Tax Changes for Private Foundations
The government is also implementing tax changes affecting private foundations. From the assessment year, the interim tax on certain foundation income will increase from 23% to 27.5%. This adjustment is part of the broader effort to increase revenue and restructure the state budget.
Broader Economic Context and Additional Reforms
These changes occur alongside other reforms already enacted, including the abolition of educational leave and the removal of VAT exemptions for solar installations, as well as increases to tobacco tax and the bank levy. These measures, passed in March, represent a first wave of budgetary adjustments. The “Budget Restructuring Measures Act II,” passed in May, focuses on the fee increases and health insurance adjustments detailed above, and is expected to generate a total of €760 million in additional revenue by , with €20 million in offsetting relief measures.
Social Benefits and Healthcare Improvements Planned for 2025
Despite the increases in contributions and fees, Austria is also planning increases to social benefits and improvements to healthcare services starting . Pensions, social assistance, and family benefits will all rise by 4.6%, reflecting adjustments for inflation. Minimum social assistance will increase to €1,209 net for individuals and €1,692 net for couples. A permanent €60 monthly deduction per child will be introduced for low-income single earners and parents.
In healthcare, €600 million will be allocated to hospitals, and €300 million will be invested in new medical practices and primary care units, with the goal of reducing wait times. The Electronic Health Record (ELGA) will be expanded to include a health app, consolidating diagnoses, lab results, and prescriptions. Expanded free vaccinations are also planned, including influenza, HPV (up to age 30), and RSV for newborns, with further additions to be announced.
Social Insurance Contribution Caps to Increase in 2026
Looking ahead to , the cabinet has backed proposals to raise the ceilings for social insurance contributions. The draft legislation lifts the contribution ceilings to €8,450 for pension and unemployment insurance and €5,812.50 for health and long-term care. This will push the annual pension cap to €101,400. The changes, if approved by the Bundesrat, will apply from . Those earning above the previous limits will pay more in contributions, while most insured workers will remain unaffected. Higher pension contributions will increase future entitlements, unlike higher health contributions.
For example, someone earning €5,800 gross will see their health contributions increase by €25.16 and their care contributions by €6.90 per month. Someone earning €8,450 gross will see their pension contributions rise by €37.20 and their unemployment contributions by €5.20 per month. Related changes include a higher Versicherungspflichtgrenze of €6,450 and a basic tax allowance rising to €12,348. Variable insurer surcharges could also reduce take-home pay, with some analyses suggesting potential losses of over €500 a year for certain households.
These combined measures represent a significant restructuring of Austria’s financial landscape, balancing increased contributions and fees with expanded social benefits and healthcare investments.
