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Pension Increases

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 2021 has been set at 1.015. However, in 2021 the pension adjustment will deviate from the reference value. Hereby the Austrian Parliament followed a government proposal to strengthen the income of small and medium pension recipients.

The 2021 pension adjustment includes a sliding scale which increases smaller pensions considerably:

  • Smaller pensions up to EUR 1,000 will be increased by 3.5 percent.
  • Overall pensions from EUR 1,000 up to a pension amount of EUR 1,400, are linear depreciated from 3.5 percent to 1.5 percent. 
  • Pensions from EUR 1,400 up to EUR 2,333 are increased by 1.5 percent.
  • Pensions above EUR 2,333 are increased by a fixed amount of EUR 35.


The average increase in consumer prices, on which the calculation of the adjustment factor is based, amounted to 1.5 percent. For recipients of smaller pensions, this means that their pension increase is 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. Thereof around 855,000 are in the stage, which will receive a pension increase of 3.5 percent. Somewhat more than 340,000 persons are in an incremental stage; this means they receive an increase of between 1.5 and 3.5 percent. Around 600,000 pensioners receive an increase of 1.5 percent and somewhat more than 370,000 persons receive a fixed amount of EUR 35.

Summarized: Herewith almost 1.2 million pensions are stronger increased, as pensions would had been adjusted by inflation.

last update: 19 January 2021