August 4, 2023 is Equal Pension Day in Austria – which means: In purely mathematical terms, today is the last time women in Austria drew their pension in the current year. When it comes to pensions, the diverse disadvantages of women in the labor market are particularly evident, because the gender pension gap is the result of the gender difference in working life! There are major differences in pension amounts across Austria.
Equal Pension Day – striking differences in pensions
On Equal Pension Day, this year on August 4th, the discrimination against women in pensions becomes clear again. That is the day when men have already received as much pension as women will receive until the end of the year. The gender pension gap is closing very slowly and we are still a long way from gender equality in pensions. This year, the gender gap between men’s and women’s pensions across Austria is 40.5 percent. This means that men in Austria receive an average of EUR 2,162 in old-age pensions and women only EUR 1,285 – this results in a monthly difference of EUR 877. The extent of the gap varies greatly across the federal states.
Vorarlberg and Upper Austria lag behind
A look at the map of Austria shows striking differences: the gap is highest in Vorarlberg (47.3 percent), followed by Upper Austria (45.8 percent) and Tyrol (44.1 percent). In Vienna, the pension gap is “only” 29.8 percent. We can only speak of equality when Equal Pension Day falls on December 31st – in all federal states!
Reasons lie in female employment biographies
While the performance-oriented pension account is based on an ideal-typical male uninterrupted full-time career, it is ignored that the reality for women looks very different, because actual equality for women is far from being achieved:
Equal pay for work of equal value is far from reality
Women in Austria earn an average of 16.9 percent (2021) less than men, despite full-time employment all year round. In some federal states (Upper Austria and Tyrol), the income difference is more than a fifth. In Vorarlberg, the income disadvantage is almost a quarter. A major reason for the lower women’s incomes is the social and economic undervaluation of typical women’s sectors, such as cleaning, trade, nursing and social work and childcare. The lower incomes result in lower credits in the pension account.
Part-time work is female
Five out of ten Austrian women work part-time, but only around one in ten men. In Upper Austria, the province with the highest rate of part-time work for women, six out of ten women work part-time. A lack of public childcare and educational facilities, too few nursing and care facilities for the elderly and those in need of care are forcing women to work part-time. They compensate for the shortcomings of the public sector privately, at their own (massive) expense. In addition to the direct costs (lower income), even short periods of part-time work have considerable indirect costs due to a significant reduction in the amount of pension: With a monthly full-time salary of EUR 2,500 gross (38.5 hours), a reduction to 22.5 hours in one period costs That calculates around 48,300 euros in direct and indirect costs over five years The importance of the institute before.
Unpaid work is women’s work
Cooking, cleaning, ironing, vacuuming and looking after the children at home – mostly alone – is still the reality of many women. Loud Working climate index for women from the Upper Austrian Chamber of Labor (2022), 60 percent of women in Austria state that they mostly do the entire household (in multi-person households) alone or alone. No contribution basis is credited to the pension account for the many hours that women work “for free” at home.
Child-Related Interruptions
This shows that in eight out of ten partnerships it is the mother alone who interrupts her employment AK re-entry monitoring 2022, although fathers have had the opportunity to take a break for around 30 years. The interruptions have massive consequences for the further employment career and consequently for the pensions of the women. Part of the losses on the pension account are compensated for by the public sector stepping in and crediting child-rearing periods of up to four years per child in the form of partial insurance periods. However, the long-term damage caused by the interruptions is usually carried along. Because the child-related interruptions lead to a financial dip in female employment biographies, which is rarely made up for. In addition, the assessment of the child-rearing periods of currently 2,090.61 euros gross is clearly too low.
Societal and social structures drive women into poverty in old age
Retirement is the reflection of working life, so it is not surprising that poverty in old age mainly affects women. For this reason the At-risk-of-poverty rate of 26 percent for single women with a pension above average. For men it is 17 percent. This means that more than a quarter of all single women with pensions are income poor. If the pension is too low, the pensioners are entitled to a compensatory allowance. The current compensatory allowance reference rate for single people (2023: €1,110.26 per month gross, 14 times) and for couples (€1,751.56 per month, gross, 14 times) does not protect against poverty in old age. It is well below the so-called at-risk-of-poverty threshold (EU SILC 2022) of 1,392 euros or 2,088 euros per month. Loud Austrian Statistics around 131,000 women in Austria received a compensatory allowance in December 2021. That is about two thirds of the recipients.
Complex problem situations require a wide range of measures
In order to increase women’s pensions, a complex set of measures is needed that improve the pensions of current and future female pensioners in the short, medium and long term. Measures such as pension splitting are not able to effectively combat poverty in old age, but only lead to a redistribution of financial resources within a household. But the problem must be tackled at the root.
In pension insurance:
Higher partial compulsory insurance on the pension account for child-rearing and care leave periods in the amount of the monthly Austrian average earned income (2021: 2,703 euros). Raising the compensatory allowance reference rate above the risk of poverty threshold (currently 1,392 euros). There must be anti-poverty pensions.
Finally closing the income gap!
The demand for equal pay for work of equal value remains. A comprehensive revaluation – socially and economically – of typical “women’s industries” such as cleaning, trade, child education and care, nursing and social services is needed. Fair wages, therefore a collectively agreed minimum wage of 2,000 euros gross per month.
Enable true freedom of choice:
Through a well-developed, full-time, nationwide, free range of child education and childcare facilities with flexible opening times and a maximum of five weeks closing times including a legal right to a childcare place from the 1st birthday. A sufficient range of professional, mobile and inpatient care as well as care offers for the elderly and those in need of care. Right to switch between full and part-time work.
FAIRdistribution of paid/unpaid work:
This requires a balanced distribution of working hours, in particular shorter full-time work with equal pay and staff for both sexes. Reform of the childcare allowance so that there is a real incentive for sharing between partners.