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EU PolicyWatch

Database of national-level policy measures

Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure AT-2022-1/2919 – measures in Austria

Tax-free "cost of living" bonus payments

Steuerfreie Teuerungsprämie

Country Austria , applies nationwide
Time period Temporary, 01 January 2022 – 31 December 2023
Context War in Ukraine
Type Legislations or other statutory regulations
Category Responses to inflation
– Increasing income in general
Author Bernadette Allinger (Forba) and Eurofound
Measure added 16 September 2022 (updated 20 September 2022)

Background information

Due to the high inflation, driven by increasing energy and food prices and supply shortages, the federal government of Austria has issued three anti-inflation packages in the course of spring and summer 2022. The latest package from August 2022 consists of several measures targeted towards compensating businesses, workers and citizens for the increasing prices, including financial measures supporting families in the cost-of-living crisis , a tax reform abolishing the “cold progression” and adjustment of social benefits to inflation , the establishment of a housing umbrella programme for securing one’s home and a climate bonus and inflation bonus .

Content of measure

In order to allow employers to pay tax-free bonus payments to their employees in order to support them in the face of increasing prices, a similar regulation as the tax exemption for COVID-19 bonuses was initiated. These so-called "cost-of- living premiums" take the form of additional one-time payments which are tax-free and social security-free up to a total of €3,000 in the calendar years 2022 or 2023. Of the total amount, €1,000 are linked to a corresponding collective regulation (wage structure regulation) and €2,000 can be granted to individual employees.

Use of measure

No information available (yet).

Target groups

Workers Businesses Citizens
Employees in standard employment
Applies to all businesses Does not apply to citizens

Actors and funding

Actors Funding
National government
Employer

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Consulted Consulted
Form Direct consultation outside a formal body Direct consultation outside a formal body

Social partners' role in the implementation, monitoring and assessment phase:

  • No involvement
  • Main level of involvement: Peak or cross-sectoral level

Involvement

According to information from the Chamber of Labour, this measure has been part of a common "package of demands" presented by the heads of the social partner organisations at a (non-public) summit with representatives from the national government.

Views and reactions

It can be assumed that the social partners are content with the implementation of the measure.

Sources

Citation

Eurofound (2022), Tax-free "cost of living" bonus payments, measure AT-2022-1/2919 (measures in Austria), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/AT-2022-1_2919.html

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