To ensure that the purchasing power of pensions remains intact, they are always multiplied by the statutory adjustment factor on 1 January of each year.
The adjustment factor is based on a reference value. The reference value for pension adjustments is set in such a way that the increase in pensions corresponds to the rise in consumer prices.
The reference value for 2022 has been set at 1.018. However, in 2022 the pension adjustment will deviate from the reference value. Hereby the Austrian Parliament followed a government proposal.
The 2022 pension adjustment includes a sliding scale which increases smaller pensions considerably:
- Smaller pensions up to EUR 1,000 will be increased by 3.0 percent.
- Overall pensions from EUR 1,000 up to a pension amount of EUR 1,300, are linear depreciated from 3.0 percent to 1.8 percent.
- Pensions above EUR 1,000 are increased by 1.8 percent.
The average increase in consumer prices, on which the calculation of the adjustment factor is based, amounted to 1.8 percent. For recipients of smaller pensions, this means that their pension increase is almost twice as much as that provided for by the law. Pensions of this amount are below the income tax threshold, so the increase in pensions is also tax free.
Due to the 2021 pension adjustment there are approximately 2,2 million recipients of a statutory pension. Therefore around 821,000 are in the stage, which will receive a pension increase of 3.0 percent. Somewhat more than 267,000 persons are in an incremental stage; this means they receive an increase of between 1.8 and 3.0 percent.
Summarized: Herewith more than 1,1 million pensions are stronger increased, as pensions would had been adjusted by inflation.