Austria Weighs a Third Path Between Full-Time Work and Early Retirement

Vienna — For Austrians whose bodies give out before their working years do, the labour market has long offered only two doors: full employment or none at all. The liberal NEOS party wants to install a third.

Social affairs spokesman Johannes Gasser is pushing for a statutory "partial work capability" (Teilarbeitsfähigkeit) that would let people with health limitations stay in their jobs on reduced hours while receiving state compensation for the lost income. He argues the current all-or-nothing setup forces too many experienced workers out of employment for good.

The machinery to make it happen is already turning. Social Minister Korinna Schumann has confirmed that a working group is examining the practical side, drawing in the Austrian Health Insurance Fund, the pension insurance agency, the public employment service (AMS) and the social ministry's own service arm.

Already in the coalition deal, still short on numbers

Politically, the idea is settled: the government programme of the ÖVP, SPÖ and NEOS explicitly lists partial work capability — whether through fewer hours or a move to a different kind of job — as a planned reform.

What is missing is the substance. Nobody has yet spelled out who would qualify, what percentage of working hours would count as "partial," or how much the state would actually pay out.

Gasser frames the case around workers who have spent decades in physically punishing jobs and can no longer manage a full week. Beyond reduced hours with partial income replacement, he wants early retraining offers, structured help for returning to work, and a thorough overhaul of the rehabilitation allowance (Rehageld).

The numbers behind the push

The debate rests on a stubborn labour-market problem among older jobseekers. According to NEOS figures, 41 percent of unemployed people over 50 report health impairments. Among jobseekers over 55, the party puts the share at 45 percent.

Without graded steps between full capacity and incapacity, Gasser contends, these people tend to slide into long-term unemployment or leave the workforce early altogether.

NEOS draw a line at the bonus-malus plan

Not every proposed remedy wins the party's backing. Gasser has rejected the bonus-malus system for employers championed by the SPÖ, which would reward or penalise companies according to how many workers over 50 they hire.

He called the concept the right goal pursued with the wrong tool. Levies and financial penalties, in his view, cannot cure back problems, teach anyone a new trade, or keep jobseekers in work over the long run.

The argument over how to handle older workers is far from settled. On the union side, Chamber of Labour president Renate Anderl and Austrian Trade Union Federation (ÖGB) president Wolfgang Katzian are sticking with their plans and have said they will present the bonus-malus system for employers — based on how many staff over 50 a company has, or lacks — once again on Monday.