“I never worked full-time. Because of the four children I always worked part-time. It won’t be more than the minimum pension for me anyway, I think to myself. Really. But there are two of us, me and my husband, I think”, said a 49-year-old Viennese woman in conversation with Forba pension expert Ingrid Mairhuber for the trapezoidal analysis of the differences between women’s and men’s pensions. So many women are well aware that part-time work will reduce pensions later on.
An example calculated especially for the “Wiener Zeitung” by Pia Zhang, pension expert at the Vienna Chamber of Labor shows, however, that a part-time phase up to the fifteenth birthday of the second child with the new pension law since 2005 has a significantly greater effect later than with a woman the exact same income and employment history for which the old system previously applied.
104 euros more loss in the new pension law
Both women – let’s call the older Maria Müller, the younger Anna Moser – have or had a full-time income of exactly 2,808.57 euros gross monthly, i.e. one that Statistics Austria last recorded for women in 2019 as the average full-time full-time employment. Maria Müller was born in 1954 and retired in 2014. Anna Moser saw the light of day in 1990 and will retire in 2055. For Müller, the old pension law applies, according to which the best 15 years of their working life are decisive for the pension. At Anna Moser, after the transition phase, the new law is already fully effective at the moment. Your pension will later come from the contributions for all working years.
Both have their first child at 30, the second two years later. The younger woman’s pension account, Anna Moser, is credited with up to four years of child-rearing time and contributions of 1,986.04 euros – with a gap of two years she has used it to the full.
If Müller and Moser stay on parental leave for a total of four years after the birth of their first child, then work 22.4 hours part-time for a further two years – according to the Forba survey for the AK, mothers with young children work just as many hours part-time – But if he then opts for full-time work again, Müller can look forward to a 78 percent net replacement rate, i.e. a pension of 1,949 euros, under the old law. For Anna Moser, who was born in 1990, the current rate of pension would later amount to less than 1,875 euros with a net replacement rate of 73 percent.
If both women stay part-time for another 13 years after four years of parental leave and only switch to full-time when the younger child is 15 years old, Moser only has to forego two percentage points or a 65 euro pension. It is different with Müller: With her, the net replacement rate drops from 73 to 66 percent and the pension from 1,875 to 1,706 euros – so she loses 169 euros. Although both made the same decisions, there is a difference of a good 100 euros per month.
Where there is still a lack of awareness
When asked about the lifelong calculation, a 42-year-old said to Mairhuber: “This is certainly a system that puts women at a severe disadvantage.” Many others know that part-time work and thus a lower income will reduce the pension later, but not that they will be neglected even more in the future than under the old law. After all, according to Statistics Austria, three quarters of all women with children under the age of 15 currently work part-time.
“Far too few people are aware of this, so much more information is needed,” says pension expert Zhang. The Chamber of Labor also proposes that mothers should have a further four years of child-rearing time credited to the mothers’ pension accounts with decreasing contributions. “That would mean an average of 60 euros more pension than today,” says Zhang. A longstanding, current AK demand is for nationwide childcare so that more mothers can work full-time anywhere in Austria.
Forba expert Mairhuber also speaks of several levels that could increase women’s pensions. In addition to the “old tiresome topic of gender pay gap, which fully affects women’s pensions”, she speaks of regulations that already exist, but that are hardly known: In a care leave or part-time care, there is not only up to six months of parental leave benefits, but also pension credits. It is also hardly known that the cost of self-insurance for longer periods of care is borne by the state.
Just like the minimum pension mentioned at the beginning does not exist. Because lower pensions are increased to 1,000.48 euros compensation allowance for single people. However, as soon as the partner in the same household has a pension or income of more than 1,578.36 euros, only the self-earned pension remains. “If that is 400 euros or less, there is no more – and therefore no livelihood independent of the partner in old age,” says Mairhuber.