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Social Policy |
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Social Policy in Austria
In the period between the world wars, the major legal foundations for modern social legislation were laid. The change to a social and welfare state has taken place since the 1950s, and the reforms between 1970 and 1980 were especially modelled on the Scandinavian systems. The developments and reforms in the social system have almost always been carried out in a consensus with the employers and the unions. This structured social dialogue has thus become a major feature of Austrian interior politics. This also explains the very low duration of strikes in Austria.
The social and health expenditure of the national government now constitutes almost half of all state expenditure, or 29 % of GDP. The challenge for the next few years is to safeguard these high social achievements for future generations under changed demographic circumstances. At the same time, the fight against “old” and “new” poverty again plays a greater political role. One of the measures planned by the government is the nationwide introduction of a flat-rate need-based minimum income.
Compulsory comprehensive insurance
Austria’s social security system is based on the principle of compulsory insurance, related to earned income. The insurance contributions are paid equally by employers and employees. The resulting insurance cover (health insurance, surviving dependants‘ pension etc.) then also extends to direct members of the family. However, this also leads to high none-wage labour costs, whereas property and other assets are subject to comparatively
low charges in Austria.
Labour law
Employment in Austria is based on an agreement between the employer and the employee. Labour law guar-antees employees legal protection and provides collective legal norms such as collective agreements and bargaining agreements. The corner-stone of a collective agreement, of which about 250 are concluded each year in Austria, is to fix minimum wage levels. However, no state-enforced minimum wage has been defined. Instead, a general collective agreement for all employees is being striven for which would guar-antee a minimum wage of EUR 1,000 for a full-time job.
The employment of salaried employees and workers can be terminated at any time by either the employer or the employee, as long as certain periods of notice are observed. In an international comparison, this means that there is a relatively low level of protection against dismissal in Austria, but on the other hand this also contributes to a strong flexibility in the employment market. The average duration of unemployment in 2006 was 99 days. Based on the Danish model of “Flexicurity”, it is now aimed to remove additional barriers in the mobility of the employment market. The basic principle is that the employee is to be given a large degree of protection, but not the respective job.
Working hours are legally regulated. Since 1975, the statutory working week has comprised 40 hours or less, depending on the specific collective agreement. In consultation with the employers and the unions, a more flexible working time model is planned from 2008 which will allow, for example, a temporary extension of the maximum working hours to 12 hours per day and 60 hours per week. In addition, part-time staff will also be entitled to receive a 25 % bonus for overtime.
All employees are entitled to 25 or 30 days of paid holiday, in line with the period of employment already served. When an employee is unable to work due to illness, the employer is required to continue paying the employee for a period of time commensurate with the period of employment already served and for a minimum of six weeks. Employees are entitled to one week per year of paid leave to care for a dependent living in the same household. For a sick child, an additional week can also be taken.
Employees of businesses that employ more than five people may elect their works councils by secret ballot. At intercompany level, employee interests are represented by the Österreichischer Gewerkschaftsbund (ÖGB – Austrian Trade Union Federation) and the Bundesarbeitskammer (Federal Chamber of Labour) and / or their regional organisations. The latter have the statutory task of looking after the economic, social, health and cultural interests of employees. Employment inspectors check for compliance with numerous regulations in the area of work-related medicine. The labour and social courts are responsible for all disputes arising from employment.
Maternity protection and parental leave
Special protection applies to pregnant women from the time the employer is notified of the pregnancy until four weeks after the birth or after the end of maternity leave. Pregnant women are not permitted to work during the last eight weeks (period of protection) before their due date. The period of protection after the date of birth is a minimum of eight weeks. Should the pregnant woman’s health be in danger, her time off may begin earlier.Maternity benefit is paid during the period of protection.
To support families / mothers with small children financially, a general child care allowance was introduced in 2005. It can be drawn by one person for a maximum of 30 months, or if the child‘s parents share this period, it can even be drawn for 36 months. The child benefit is currently EUR 436. From 1st January 2008, the “flexible child benefit” will come into force. The parents can then choose between two variants: either the existing arrangement
with a monthly payment of EUR 436 for 30 (or 36) months, or a monthly payment of EUR 800 for a shorter period of 15 (or 18) months.
Disability policy
In the past people with disabilities were mainly looked after in special institutions, but the policy-makers in Austria have now adopted the goal of enabling all disabled persons to participate as fully as possible in public life. This applies both to educational facilities and to the world of work. Today, children with disabilities are mainly taught in integrated classes together with other children, no longer in special schools. The law on employment of the disabled obliges employers tohire one disabled person for every 25 persons employed. If this obligation is not fulfilled, the employer must pay a compensatory charge which is used for the vocational rehabilitation of disabled persons. The national government provides EUR 7.3 million for integration measures.
In 1997, the Austrian constitution (Article 7 B-VG) codified an express ban on discrimination against the disabled that also provides for equal treatment in all areas of daily life. The law on equal rights for persons with disabilities, also contains a comprehensive ban on discrimination against disabled persons
and their dependents. A lawyer for the disabled is responsible for persons with disabilities. The constitution has declared sign language a separate language. However, the reality of everyday life still lags behind the law.
Care provision
Care allowance, which is available in seven categories according the amount of cares required (in a monthly amount of EUR 148.3 until EUR 1,562.1), relieves the bur-den of providing care and aid to those who require it. In 2006, a total of 319,009 persons received the care allowance, and for the budget year of 2007, about EUR 1.5 billion are earmarked for this purpose. In spite of this state assistance, per-manent intensive care at home cannot
be provided by most families, so the national government decided to adopt new financing and employment models. Work is currently in progress on the implementation of the care reforms. The amendment of the Federal Care Allowance Act in 2007 created the possibility of a public grant for 24-hour care at home.
Need-based minimum income
Austria is one of the richest countries in the world. But the reality of life in this country also included people who live in poverty. According to statistics, 460,000 people in Austria are affected by “manifest poverty”. To combat poverty, work is being carried out on a model which envisages providing a living wage by raising the collectively agreed minimum wage for full-time employees in combination with other steps to ensure that the people in Austria do not fall below a need-based minimum income. The increase of the compensatory benefit for pensioners to EUR 726 per month has already been carried out. From 2009, the need-based minimum income is to be guaranteed by law.
Pension system
Like all other insurance systems that provide a social safety net, retirement payments are primarily based on the legally required pension insurance. Contributions are normally compulsory for the entire period of employment. Although the legal pension age is 65 for men and 60 for women, the actual average pension age is 58.5 for men and 57.7 for women. Various measures are being adopted, not least by preventive work in the health care sector,
to attempt to bring the actual pension age closer to the legal pension age.
The pension harmonisation law, which came into effect at the beginning of 2005, marks the temporary end of a long-term reform process for the long-term protection of pensions for future generations and brought uniform regulation for all occupations. This applies to all working people under 50 years of age. Under this system, people who retire at the age of 65 after 45 years under the insurance scheme receive 80 % of their average lifetime income. The annual increase in pensions is laid down in the law.
The uniform pension contribution level for employers and employees is 22.8% of the gross income. The principle is: equal contributions bring equal benefits.
Significant measures were also taken to build up the two other pillars of pension coverage – work and private funds – by making them more attractive from a taxation point of view. The gradual transfer of claim settlements to inter-company pension funds is the first important step in this direction. The third pillar is private provision for pensions, which operates on the principle of capital coverage, and the amount of which depends on the income of the respective insurance institution.
Healthcare
Austria has a high-quality healthcare system, that is fundamentally open to every insured person (and his / her dependents), who needs medical care. The costs are assumed by the respective insurance bodies. For needy people, the costs are borne by social welfare. The number of persons in Austria who do not have health insurance was estimated at only 160,000 in 2006. The problem of this system is that the costs of the health care system has increased disproportionately over the last few years compared with the general level of wage increases and therefore the income from insurance contributions increases.
Family policy
Family policy has traditionally been an important area of Austrian social policy. Investments in the family are considered investments in the future. EUR 5.7 billion has been earmarked for the promotion of families in 2007, which makes Austria a leader in this area in the European Union. Austria has the third highest level of direct transfer payments to families after France and Luxembourg.
The two central transfer benefits paid to families in Austria are family allowance and childcare allowances, which can be drawn until the child reaches the age of 3. It is possible to take paternal leave, but this possibility is hardly used. Childcare periods of up to four years are now calculated as pension periods.
The most important instrument in family policy is the Family Burdens Equalisation Fund (Familienlastenausgleichsfonds-FLAF), which was introduced in 1955 and in 2007 provides EUR 5.4 billion for the promotion of families. The largest part of this amount is paid for child allowance alongside other transfer payments such as child benefits, school book support and free travel for school pupils. In addition, a family allowance of between EUR 156.30 and EUR 229.10 is paid until the children reach the age of 27; the amount paid depends on the age and number of the children.
Women’s policy
In an international comparison, Austria has a high proportion of employed women. In 2006 it was 63.5 %, and it is hoped to increase it to 68 % in the next few years. Because of the very different employment biography and the fact that there are fewer opportunities for promotion, women still earn an average of 40 % less than men. The difference in the average pension is similar. In 2005 the average pension for women was EUR 741, but men could expect an average pension of EUR 1,259.
The general guiding principle of policies for women is therefore the concept of “Gender Mainstreaming” which has also been accepted by Austria; it is a strategy for the equality of men and women at all vocational and social levels.
The national government is now trying to implement a range of measures to reduce the salary discrepancy between men and women. The top priority here is to provide more child care places to ensure that women are fundamentally able to go back to work more quickly after maternity leave. It is estimated that there is currently a shortage of 50,000 child care places, especially for children under three. In addition, the provision of afternoon supervision in schools should be improved. Here, too, there is a great shortage in some regions.
In addition to these improvements to harmonise work and the family, policies to support women also concentrates on the areas of education and training. Half of the employment market funds are reserved for the training of women; extra support is given to companies which employ girls in areas which are not traditional women‘s jobs.
Although the majority of graduates and upper secondary school leavers have been female for many years, women in managerial positions are a clear minority. To counter discrimination in the world of work, the national government has therefore set up equality watchdog offices. And at the national level and in the federal provinces there are women‘s representatives and female solicitors specialised in equality issues. In addition to the world of work, which also includes the fight against sexual harassment in the workplace, the fight against violence in the home is another area of emphasis in Austrian women‘s policies.
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