With 146,000 women compared to 64,000 men over 65 years of age, the group at risk of poverty is more than twice as large. The annual EU Silk survey shows that, at 29 percent, almost a third of older women are at risk of poverty. After all, according to Statistics Austria, women already receive an average old-age pension of EUR 1,167 gross per month, while the average for men is EUR 2,022.
With a higher employment rate and a retirement age of 65, the pension for women should actually increase. Actually, because the Wifo pension expert Christine Mayrhuber made it clear in the trapezoidal analysis of women’s pensions: “The main factor behind the pension arrears of women is their lower earned income over the course of their working life, the second influencing factor is the lower number of years of work.”
However, women cannot compensate for their lower income any more than long career breaks at a young age by working longer in old age. A sample calculation by AK Wien for the “Wiener Zeitung” also shows that, due to the 2005 pension reform, lower contributions from longer part-time phases will in future reduce mothers’ pensions even more significantly than before.
Planned against poverty in old age
The turquoise-green government is aware of the basic problem. In her program she literally declares war on poverty in old age. The specific measures for this are, however, vague: There is talk of increased information about the consequences of part-time work and missing years of contributions, of promoting a more partnership-based division of family work and pension entitlements – specifically, automatic pension splitting.
Parents up to the age of seven have the option of redistributing pension contributions on a voluntary basis. In 2020, the Pension Insurance Fund processed 951 applications, in 2019 there were 583. From 2006 to 2018 a total of 1,293. Even among all insured persons, including the self-employed, there were only 639 cases of pension splitting in 2019. With around 640,000 couples with children under the age of 15, only a small minority use this.
It is now planned that the pension contributions will be automatically distributed to both parents until the child is ten years old. Unlike today, child-rearing periods are excluded, during this time the 1.78 percent contributions of 1,986.04 euros are credited anyway. In addition, a one-time, time-limited opt-out option is planned. While Meri Disoski, women’s spokeswoman for the Greens, sees a “small patch on a gaping wound in old-age poverty among women” in pension splitting, Women’s Minister Susanne Raab (ÖVP) expects an “enormous” improvement in pensions for mothers. It is “at the top of my priority list and will be implemented as soon as possible,” she said in an interview with the “Wiener Zeitung”. “Details are still being worked out, negotiations are ongoing,” the ministry said when asked. Raab also hopes that women will be promoted in MINT professions, because “better earning opportunities” will prevent women from poverty in old age.
The Ministry of Social Affairs refers to the government’s acute measures against poverty, such as the increase in the compensatory allowance to 1,000 euros and the multi-stage pension adjustment. Women will also benefit from the early starter bonus from 2022, according to which those who have worked between the ages of 15 and 20 should receive up to 60 euros in addition to their pension. 20 million euros are also reserved for projects to combat poverty caused by the Covid 19 crisis.
Experts’ pension-increasing ideas for women
Wifo pension expert Christine Mayrhuber said in an interview with the “Wiener Zeitung” that the 2005 pension reform was “at the expense of women who work part-time for a long time”. “The whole point of this reform was to reduce state pension expenses in the future. Distribution issues were not an issue.”
Pension splitting increases, however, especially women’s pensions, where the income difference between the parents is very high, but hardly if both parents have low incomes. Mayrhuber also suggests extending child-rearing periods from currently up to four years per child. “You should also make the bookings into the pension account during a care leave and part-time care work better known,” she says. An automatic mechanism would also be possible here; an application currently has to be submitted.
In December 2020, according to the Ministry of Social Affairs, 12,469 were self-insured as caring relatives, here the state pays pension contributions – 90 percent of them women. With a total of around 800,000, this is not a large proportion either.
Women – just like men in low income phases – could also benefit from a state-financed minimum pension contribution, regardless of their actual income, says Mayrhuber. However, the government program does not provide for this at all, so it would have to be negotiated first – just like the amount of such contributions up to the insignificant level (475.86 euros), the compensation allowance or a higher minimum wage. For Mayrhuber, however, the advantages are obvious: “Women in particular could earn their own pension assets in this way.” It would also be independent of the income of the father of the children together.