In 2009, Austria scrapped the "Bonus-Malus System" for employing or terminating employment relationships involving persons older than 50 as part of its response to the financial crisis. After more than three years during which there had not been any payment obligation in case of a termination, a levy was reintroduced with 1 January 2013. According to the government programme of Austria's newly-installed coalition government, this levy shall in turn be replaced by a new "Bonus-Malus System" fully effective with the start of 2017.
One goal that Austria's new government has outlined in its government programme for the period 2013 to 2018 is to increase the average actual retirement age from 58.4 in 2012 to 60.1 in 2018. Along with raising the retirement age, the government also seeks to increase the employment rate of persons older than 55. To achieve these goals, the reintroduction of a "Bonus-Malus System" is planned. However, it has to be noted that currently no respective draft bill exists and, hence, the concrete realization of the law has to be awaited.
Until 2009, a levy had to be paid to the respective regional social insurance fund (Gebietskrankenkasse) if an employee above the age of 50 was terminated. On the other hand, employers hiring persons above the age of 50 were exempt from paying contributions to the unemployment insurance funds for these employees. In the course of the financial crisis, this system was scrapped and no longer applied as of 1 September 2009.
Effective as of 1 January 2013, a new levy for each termination was introduced as part of Austria's second stabilisation package (2012). This levy, which becomes due for several different kinds of terminations, amounted to EUR 113 in 2013 and currently (2014) stands at EUR 115. For further information about this levy, especially with regard to when it may be avoided, please see our 2012 Legal Insights article, which can be found under the following link: http://www.schoenherr.eu/news-publications/legal-insights/employers-have-to-pay-eur-110-for-each-termination
To strengthen the reintegration of persons aged 50 or above in Austria's labour market, a hiring bonus shall be granted in the future. Thus, if an unemployed person older than 50 years is hired, such a bonus shall become due after a certain time. However, neither the bonus amount nor the period of time after it shall become due is currently known. These figures were not provided in the government programme. Hence, the future realization of this programme point by the governing parties has to be awaited.
The Malus shall only apply to employers with 25 or more employees; thus, the Malus regulations shall not apply to smaller businesses. For each business sector a certain employment rate differentiated according to gender for age groups 55 to 59 and 60 and above will be stipulated.
The required employment rate, which has to be fulfilled the first time in 2016, as well as the current share of older employee in each business shall be communicated during the course of 2014.
The current levy will remain in place until 2017. However, the levy shall be used solely to support the employment of persons aged 55 or older. As of 2017, the levy shall be dropped for all employers, independent of the number of employees they have. Instead of the levy, the new Malus contribution for all those employers which have more than 25 employees but an insufficient percentage of employees aged 55 or older becomes due. Finally, the employment of apprentices will be credited in this calculation. 50% of the Malus contributions shall be used to fund Bonus payments, with the other half used for workplace health promotion.
To sum up, the following shall take place in the next years:
A bonus shall be introduced for the hiring of unemployed persons aged 50 and up.
The "termination levy", amounting EUR 115 (2014), remains in force.
Employers shall be informed about their current share of older employees and about the required employment rate for such employees as of 2016.
2015 and 2016:
The "termination levy" still remains in force.
The "termination levy" shall be replaced by the Malus payment, which only applies to employers with 25 or more employees.
It remains to be seen how the social partners, who were assigned with the implementation of the "Bonus-Malus System" within the government programme, will actually implement the system.
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