Austria is sketching out savings on taxes, AMS support and family payments, but not everything is fixed. Which measures look most concrete so far?
Austria’s government has agreed the broad outlines of its new 2027/28 double budget, with a package worth €5.1 billion split between savings and what it calls future-focused spending. But for most people living and working here, the more useful question is simpler: what could actually change in everyday life?
The short answer is that quite a lot could. The coalition is talking about changes to tax deductions, unemployment-related support, family benefits, pension increases and some health-related entitlements, according to the government’s own presentation.
This is still a framework deal, not the finished budget. The coalition has set out the main political agreement, but ministries are still negotiating the details ahead of the budget speech on June 10th.
Your tax return could get a bit less generous
One of the clearest changes for ordinary employees is the planned end of the home-office flat rate.If that goes through as outlined, workers will no longer be able to claim the Home-Office-Pauschale in their annual tax assessment.
The government also wants to scrap the profit allowance linked to securities. That is more relevant to self-employed people and business owners who currently use part of those investments as a deductible business expense.
Beyond that, the package also includes higher corporate tax for large companies, an extended bank levy and a higher real-estate gains tax for older properties.
READ ALSO: What foreign residents in Austria should know about taxes
AMS-related support could become tougher
This is one of the biggest areas to watch.
The government says the labour-market reform element of the package is worth around €1 billion at full scale, and a large chunk of the savings is meant to come from the labour-market and social sphere.
Partner income would partly be counted again for Notstandshilfe, the emergency assistance people can receive through the AMS after unemployment benefit runs out. Since 2018, a partner’s income has not reduced that payment. Under the new plan, a partial means test would return depending on how much the partner earns.
There also appear to be plans to make it harder to use the AMS as a routine off-season stopgap, especially in tourism. The exact model is still not settled, but Der Standard reported that options under discussion include a waiting period before unemployment benefits start, possibly for people who resign or even for some mutual terminations.
READ ALSO: AMS reforms: The rule changes long-term unemployed people in Austria need to know
Family payments look set to tighten too
Family support is another area where the government seems to be looking for savings.
Familienbeihilfe will not be indexed upwards in the coming years – meaning it would not automatically rise with inflation.
The government also plans to tighten the Kinderbonus Plus. Under the proposal, families would only get the full amount if the second parent claims at least €500 of the tax credit, and that rule would apply only after the child’s third birthday, according to Der Standard. The idea, the paper reported, is to create more incentive for both parents to be in paid work.
READ ALSO: Familienbeihilfe: How can I get Austria’s family allowance payments?
Health benefits are not untouched
Health is in the package too, though in a more selective way.
Social insurance providers are meant to cut spending on Kuren by around €75 million in 2028. These are cure stays, not medical rehabilitation, which are not part of the planned cut.
High earners and pensioners may also be hit
The official presentation says there will be moderate changes to pension indexation, and Finance Minister Markus Marterbauer said pension increases in 2027 and 2028 would end up around 0.25 percent below inflation overall, while still preserving older people’s purchasing power.
The contribution ceiling for social insurance would be raised by an extra €200, meaning people on higher salaries would pay contributions on a larger share of their income. A solidarity-type contribution on very high pensions would be increased.
READ ALSO: In numbers: What’s a ‘normal’ monthly budget in Austria in 2026?
What is actually fixed and what is not
The broad political agreement is there. The details are not.
Some measures, like the higher bank levy, the lower home-office tax generosity and the return of partner-income checks in emergency assistance, are already being described quite specifically. Others are still more like a direction of travel than a finished legal text.
Key vocabulary
Notstandshilfe – emergency assistance paid after unemployment benefit runs out
Familienbeihilfe – family allowance
Kinderbonus Plus – child-related tax credit
Home-Office-Pauschale – home-office flat-rate tax allowance
Kur – cure stay, usually a health-related recuperation stay
Höchstbemessungsgrundlage – contribution ceiling for social insurance