Teilpension & Altersteilzeit | Moore Salzburg GmbH

Introduction

The amendment to the law, which introduces a „partial pension“ and changes to partial retirement with effect from 1 January 2026, was published in the Federal Law Gazette on 24 July 2025 (Federal Law Gazette I No. 47/2025). We have summarised the most important contents and changes for you.

Partial pension

In order to enable insured persons to gradually retire from working life, those who fulfil the requirements for an (early) retirement pension will be given the opportunity from 2026 to take the (reduced) pension in addition to continuing to work. To claim a corridor pension, heavy labour pension, long-term insured pension or regular old-age pension as a „partial pension“ (i.e. to a defined percentage of the full pension). This means that part of the pension is paid monthly while continuing to work part-time. This model continues to generate insurance periods and contribution bases with positive effects on the final pension amount. The prerequisite is an agreement between the employee and employer (no legal entitlement) and a demonstrable reduction in the previous working hours by at least 25 % and a maximum of 75 %:

Extent of the reduction in working hours	Extent of the partial pension
by 25 % to 40 %	25 % of the current pension account credit
by 41 % to 60 %	50 % of the current pension account credit
by 61 % to 75 %	75 % of the current pension account credit

AttentionThe planned new „partial pension“ should not be confused with the previous AMS benefit of the same name for „extended partial retirement“ after reaching the corridor retirement age. In contrast to the previous „partial pension“, the „partial pension“ possible from 2026 is a genuine pension, i.e. granted by the pension insurance institution.

The introduction of the partial pension adds another option to the „range“ of possible variants for the „flexible combination of work and pension“ for pension candidates. The following variants are conceivable (depending on age, years of insurance, desired or possible extent of work by agreement with the employer, etc.):

Possible variants for people of „retirement age“

Eligibility requirements for early retirement pension fulfilled, but continue to work normally as before (without drawing a pension)
Draw a full early retirement pension and work part-time on the side
Reached standard retirement age, but continue to work as normal (without drawing a pension)
Reached standard retirement age, draw full standard pension and continue to work alongside it
NEW from 2026: Take early retirement pension or standard pension as partial pension (25 % to 75 % of the pension, part-time 25 % to 75 %)

Practical tipCompanies should exercise restraint when giving concrete advice to employees as to which option would be the most financially rewarding in individual cases. Pension regulations are extremely complex and employers rarely have all the information required for a comprehensive assessment of pension law. It is therefore advisable for the personnel/payroll office to refer enquiries about pension advice to external advice centres - such as the social law department of the Chamber of Labour or the Pension Insurance Institution (PVA) - or to the information material published by these bodies. The PVA offers on its homepage a Brochure with detailed information about the partial pension.

Changes to partial retirement

From 1 January 2026, the following measures are planned for partial retirement (§ 27, § 28, § 79 para. 189, § 82 para. 8 AlVG):

Gradual reduction in the maximum period of partial retirement benefit entitlement for continuous partial retirement from five to three years (before fulfilment of the eligibility requirements for the corridor pension or before reaching the standard retirement age):
- Start of partial retirement benefit in 2026: 4.5 years,
- Start of partial retirement benefit in 2027: 4 years,
- Start of partial retirement benefit in 2028: 3.5 years,
- Start of partial retirement benefit from 2029: 3 years.
Gradual increase in the required unemployment insurance periods before partial retirement from 15 (780 weeks) to 17 years (884 weeks) by 1 January 2029.
Redefinition of the upper value (for continuous partial retirement, starting from 01.01.2026): The upper value (12-month average) relevant for calculating the salary equalisation is now only to be calculated on the basis of the Remuneration for normal working hours (in particular excluding overtime and overtime lump sums).
Reduction of the AMS replacement rate for continuous partial retirement starting from 01.01.2026, to 80 % in the years 2026 to 2028 (90 % will apply again from 2029).
Cancellation of partial retirement benefit if taking up employment alongside partial retirementThe partial retirement allowance (incl. wage equalisation) and the application of the full SI contribution basis are waived in accordance with § 28 AlVG for those months in which the employee works for another employer in addition to the partial retirement (exception: this employment was already regularly exercised in the year before the start of partial retirement). The employee is obliged to notify the AMS. This ban on secondary employment applies immediately to partial retirement starting on or after 1 January 2026. However, for partial retirement already started before 2026, the regulation only applies with a time delay from 1 July 2026, i.e. a six-month transitional phase is available for the termination of „partial retirement“ employment that is detrimental to partial retirement benefits.

Important note:
Sections 27 and 28 AlVG regulate the requirements for partial retirement benefits vis-à-vis the AMS and generally leave the labour law side unaffected. It is therefore not legally certain whether the discontinuation of partial retirement benefits due to unauthorised secondary employment automatically eliminates the right to wage compensation in the relationship between the employee and the company. To be on the safe side, it is therefore highly recommended to include a corresponding provision in the partial retirement agreement.

Update - Quick check on partial retirement

Shortened funding periodApplies to continuous partial retirement schemes starting from 2026: The maximum subsidised partial retirement period is gradually reduced from five to three years (2026: 4.5 years, 2027: 4 years, 2028: 3.5 years, from 2029: 3 years). In the transition phase from 2026 to 2028, it will still be possible to start partial retirement five years before reaching the standard retirement age, but the AMS will only grant partial retirement benefits for the relevant reduced duration.
Longer pre-employment period requiredApplies to continuous partial retirement programmes starting from 2026: The periods of employment covered by unemployment insurance required within the last 25 years before the start of partial retirement will gradually increase from 780 to 884 weeks (i.e. from 15 to 17 years) by 2029.
New „upper value“ calculation logic for wage equalisationApplies to continuous partial retirement schemes starting from 2026: Analogous to the calculation of the lower value, overtime and collectively agreed overtime may no longer be taken into account when determining the upper value. In the case of all-in payments, the AMS believes that the overtime and additional hours covered by the collective agreement should be „stripped out“ in the calculation. Part-time overtime, on the other hand, will most likely have to be taken into account (but probably without part-time overtime bonuses - clarifications from the AMS in this regard are still pending).
Reduction of the AMS replacement rateApplies to continuous partial retirement programmes starting from 2026: The replacement rate of the AMS (partial retirement allowance) is a standardised 80 %. From 2029, the replacement rate by the AMS is to be increased again to 90 %.
Prohibition of secondary employmentWhile the above-mentioned deteriorations only affect continuous partial retirement agreements with a start date from the beginning of 2026, from 2026 all partial retirement agreements (including those in blocked form) will be subject to a strict ban on secondary employment regardless of the start date.
- Part-time jobs with other employers (including marginal employment) are only permitted during partial retirement from 2026 if they were already regularly carried out for at least 28 days/year in the year before the start of partial retirement. If this condition is not met, the existence of further employment with other employers means that
  - the employer does not receive any partial retirement allowance from the AMS in the months concerned,
  - the employee's entitlement to wage equalisation no longer applies,
  - the secured SI contribution basis pursuant to § 44 para. 1 no. 10 ASVG is no longer valid and
  - corresponding reversals (reclaims and roll-ups).
- A six-month „tolerance period“ applies as a transitional period for partial retirement already in progress: unauthorised part-time jobs must be terminated by 30 June 2026, otherwise the partial retirement allowance, the wage compensation and the secured SI contribution basis will no longer apply with effect from 1 July 2026!