According to Statistics Austria, the average women’s pension was 1,313 euros in 2022, while men received an average of 2,229 euros. That results in a difference of 41 percent. Pension splitting, which has been possible since 2005, is intended to help combat old-age poverty among women, who continue to bear the brunt of childcare in many families. During this time they do not work at all or only to a limited extent, which has a negative impact on the amount of their pension.
Every year, a credit of 1.78 percent of the gross annual salary is transferred to the pension account. With splitting, for example, the working father shares a portion of this amount with the mother of his child, which is then credited to her pension account.
This is possible for the first seven years from the birth of the child. Once splitting has been agreed upon, it cannot be reversed. The number of applications for pension splitting increases every year, but is at a very low level.
In a federal state comparison, Upper Austria was at the top last year with 309 applications, according to the economically liberal think tank Agenda Austria. However, with 13,637 births, this only corresponds to a proportion of 2.27 percent. “Very few parents know that this option even exists,” says economist Carmen Treml.
Almost all applications would be made retroactively; this is possible up to the child’s tenth birthday. The amount of the split share may not exceed 50 percent. “Pension splitting does not compensate for structural factors,” says Treml. The lack of child care and the high part-time rate among women are the levers that politicians must address.
But splitting is not free: as Agenda Austria has calculated, it increases household income in pensions by between 500 and 1,000 euros net annually.
Automatic splitting?
The government program included the introduction of automatic pension splitting, but it has not yet been implemented. According to Women’s Minister Susanne Raab (VP), splitting should always occur if there is no active objection. The Greens, on the other hand, want a package of measures to combat poverty among women in old age.
Agenda Austria is also critical of automatic splitting: it would not be worthwhile for everyone, says Treml. Parents should be informed when the child is born and then choose the appropriate option themselves.
Author
Verena Mitterlechner
Verena Mitterlechner
