A. Premium-aided retirement provisions
Premium-aided retirement provisions can be claimed by all taxpayers in Austria who do not receive a statutory old-age pension.
What is the amount of the premium under the premium-aided provident scheme and what is the incentive?
A lump sum is granted as an incentive, which is calculated as a percentage of the premium paid for the respective calendar year. The retirement provision premium will amount to 4.25% in 2025. The bonus is granted only for payments amounting to 1.53% of 36 times the maximum contribution basis for social security (HB-SV).
| Maximum basis for social security contributions (HB-SV) | Maximum amount | Bonus | |
|---|---|---|---|
| 2024 | € 6,060 | € 3,337.85 | 4.25% = € 141.86 |
| 2025 | € 6,450 | € 3,552.66 | 4.25% = € 150.99 |
The bonus is credited for the last time for that calendar year in which the taxpayer receives a statutory old-age pension for the first time. In addition to granting a bonus, the institution running the pension fund for the credit institution that sells the premium-aided provident scheme must provide a capital guarantee.
Where to apply for the bonus?
The respective institution running the pension fund applies to the tax administration.
When can you first receive benefits from your entitlements?
After a minimum period of ten years (after paying the first premium) you can receive payments from your entitlements. You can choose:
- to ask for the payment of the full amount, or
- to transfer the entitlements to another pension fund, or
- to transfer the entitlements, for example,
- to an insurance company of your choice as a single premium for a supplementary pension insurance or
- to a credit institution of your choice for exclusive use to buy shares in a pension investment fund by signing an irrevocable payment plan, or
- to a pension fund where the taxpayer is already entitled to future payments as defined by the Pension Fund Act, or
- to a collective company insurance fund where the taxpayer is already entitled to future payments, or
- to an insurance company as a single premium for nursing care insurance where repurchase or lump-sum compensation is excluded and the performance of the nursing care insurance is linked to a claim to nursing care allowance.
How are incomes from premium-aided pension funds taxed?
No tax is due if the entitlements are transferred into a pension fund, or if you receive a pension from these institutions.
What happens when the entitlements are paid out?
If the entitlements are paid out, half of the credited bonuses must be paid back, and subsequent taxation of the capital yields takes place at a tax rate of 27.5%. In addition, you lose your entitlement to a capital guarantee.