On pensions the usual comparison reverses: Austria delivers considerably more to its retirees than Germany does to its own, and it carries virtually none of the old-age poverty premium that Germany has. Anyone looking to talk Austria down on this point is arguing past the figures. The criticism that holds starts elsewhere — with the question of who funds this level, how long people pay in for it, and what the Republic’s own long-term projection sets out for the decades ahead.
What the system delivers — and it really does
The OECD puts Austria’s future net replacement rate at 86.8 percent for average earners, against a statutory pension age of 65. For low earners the figure is 84.8 percent; for those on twice average earnings, 62.4 percent.
For comparison: Germany reaches 53.3 percent in the same OECD table. The gap is around 33 percentage points.
The average monthly old-age pension under the ASVG (the General Social Insurance Act) — paid fourteen times a year — is budgeted at EUR 1,867 for 2025 and EUR 1,928 for 2026.
| Germany | Austria | |
|---|---|---|
| Net replacement rate, average earner OECD, Pensions at a Glance 2025 | 53.3% | 86.8% |
| Net replacement rate, low earner | 57.7% | 84.8% |
| At-risk-of-poverty rate from age 65 | 19.5% — above the overall rate of 16.1% | 16.0% — level with the general population (15.9%) |
| Effective retirement age | 64.7 years (2024) | 61.5 years (2024) |
| Public spending on old age and survivors OECD, 2020 data | 11.2% of GDP | 14.3% of GDP |
The third row is the notable one. In Austria the at-risk-of-poverty rate among people aged 65 and over stood at 16.0 percent in 2025 (men 12.6, women 18.7), level with the general population figure of 15.9 percent. There is therefore virtually no old-age poverty premium — unlike Germany, where the rate of 19.5 percent sits clearly above the overall figure of 16.1 percent. Anyone who regards old-age poverty as an inevitable outcome of pay-as-you-go financing has to explain why it does not arise in Austria under the same principle.
What it costs
This is where the real reckoning begins. Pension expenditure by Austria’s pension insurance institutions rises to EUR 62.4 billion in 2026, while contribution revenue stands at EUR 50.0 billion. The federal government closes the gap: federal transfers cover 27.0 percent of total revenue of the pension insurance institutions. Total expenditure equals 13.7 percent of gross domestic product.
In the budget it looks like this:
| Item (federal budget estimates 2026) | Amount |
|---|---|
| UG 22 Pension Insurance — outlays | EUR 20.3 billion |
| of which federal contribution to the pension insurance institutions | EUR 18.0 billion |
| UG 23 Civil Service Pensions | EUR 13.9 billion |
| Pensions combined | around 27% of all federal outlays |
| Total federal outlays | EUR 125.9 billion |
More than every fourth euro the federal government pays out goes into pensions. And the item is growing faster than the measures it is set against: the Austrian Parliament’s Budget Service (Budgetdienst) records a rise for UG 22 from EUR 17.4 billion (2024) to EUR 23.4 billion (2029) — faster than consumer prices and nominal GDP.
The second cost driver: the retirement age
The effective retirement age among new retirees stood at 61.5 years in 2024 — 62.4 for men, 60.4 for women. The statutory pension age is 65 for men; for women it is being raised in steps to 65 by 2033.
The difference of around three and a half years works twice over: a shorter contribution phase, a longer benefit phase. Austria’s higher replacement rate is therefore bought not only with higher contributions and transfers, but also by starting to draw earlier. Germany stands better here: the average age at which old-age pensions are first drawn rose from 62.3 years (2000) to 64.7 years (2024).
What the Republic’s own forecast says
The long-term report of the Old-Age Provision Commission (Alterssicherungskommission), adopted in November 2024, works through the path to 2070. It is not a paper written by critics but the official projection:
- Total expenditure of the statutory pension insurance rises from 11.7 percent of GDP (2023) to 16.2 percent by 2060.
- The federal deficit guarantee (Ausfallhaftung) stood at EUR 11.08 billion in 2023, or 2.3 percent of GDP. It reaches around 6 percent of GDP by about 2060 and stands at EUR 47.78 billion, or 5.8 percent, in 2070.
- The total burden on the federal government rises from EUR 13.0 billion (2.7 percent of GDP, 2023) to a peak of around 6.5 percent of GDP around 2060.
- The population aged 65 and over grows from 1.82 million (2023) to 2.87 million (2060) and 2.92 million (2070).
A doubling of the federal share measured against economic output, over a period in which today’s forty-year-olds retire.
What sits on the other side
For location-independent self-employed people the question looks different than it does for employees. Austria’s tax-to-GDP ratio stood at 44.3 percent of GDP in 2025, the tax wedge for single average earners at 47 percent — the fifth-highest figure in the OECD. A substantial part of that funds a pension level you will not reach in this form as a self-employed person.
In Georgia compulsory contributions of this kind do not arise in the case considered here. Provision is organised and budgeted privately — which is not an advantage in itself but a shift of responsibility. The difference is that the means for it exist at all: 1 percent on turnover under the Small Business Status up to GEL 500,000, 3 percent above that.
Anyone weighing this route does, however, have to observe an Austrian particularity that German guides do not cover — exit taxation under § 27(6) EStG (Income Tax Act), which falls due immediately for third countries such as Georgia. The details are set out in Leaving Austria.
What follows from it
Austria does not have a benefit problem in old age; it has a funding problem in the future. That is the honest summary — and it matters for the location question, because the funding gap has to be closed through levies that fall on workers and businesses.
The full Austrian location audit with the tax-to-GDP ratio, insolvency figures and exit taxation is set out in Leaving Austria. Where Austria sits in the tax comparison against Georgia, the UAE, Cyprus and Bulgaria is shown in Georgia vs. UAE vs. Cyprus vs. Bulgaria.
The German counterpart with the signs reversed — lower benefits, lower costs, a measurable old-age poverty premium — is set out in The German pension gap.
Frequently asked questions
FAQ
Are Austrian pensions higher than German ones?
Considerably. The OECD puts Austria’s future net replacement rate at 86.8 percent for average earners, against 53.3 percent for Germany — a gap of around 33 percentage points. For low earners the figures are 84.8 against 57.7 percent. The average ASVG old-age pension is budgeted at EUR 1,928 a month for 2026, paid fourteen times a year.
Is there old-age poverty in Austria?
Less pronounced than in Germany. The at-risk-of-poverty rate among people aged 65 and over stood at 16.0 percent in 2025 (men 12.6, women 18.7), level with the general population figure of 15.9 percent. There is therefore virtually no old-age poverty premium. In Germany the rate of 19.5 percent sits clearly above the overall figure of 16.1 percent. Across all age groups, around 1.7 million people in Austria were at risk of poverty or social exclusion in 2025.
How is the Austrian pension system funded?
To a substantial degree out of the federal budget. Pension expenditure by the pension insurance institutions rises to EUR 62.4 billion in 2026 against contribution revenue of EUR 50.0 billion. Federal transfers cover 27.0 percent of total revenue. The 2026 federal budget estimates set aside EUR 20.3 billion for pension insurance, of which EUR 18.0 billion is the federal contribution, plus EUR 13.9 billion for civil service pensions — together around 27 percent of all federal outlays of EUR 125.9 billion.
When do Austrians actually retire?
The effective retirement age among new retirees stood at 61.5 years in 2024 — 62.4 for men, 60.4 for women. The statutory pension age is 65 for men; for women it is being raised in steps to 65 by 2033. The difference of around three and a half years shortens the contribution phase and lengthens the benefit phase. In Germany the average age at which old-age pensions were first drawn was 64.7 years in 2024.
Is the Austrian pension system sustainable in the long run?
The long-term report of the Old-Age Provision Commission quantifies the path without sounding the all-clear. Total expenditure of the statutory pension insurance rises from 11.7 percent of GDP (2023) to 16.2 percent by 2060. The federal deficit guarantee grows from 2.3 percent of GDP (EUR 11.08 billion, 2023) to around 6 percent by about 2060 and 5.8 percent (EUR 47.78 billion) in 2070. The total burden on the federal government peaks at around 6.5 percent of GDP around 2060.
What does leaving Austria mean for my pension?
Accrued entitlements and existing provision contracts are case-specific questions and belong in advice. More important for the planning order is a tax quirk: on a move to a third country such as Georgia, exit taxation under § 27(6) EStG falls due immediately — unlike a move within the EU or the EEA. That makes the timing of the decision a cost question in its own right.
This article is general information and does not constitute legal or tax advice. The figures come from the OECD (Pensions at a Glance 2025 — net replacement rates, public spending on old-age provision), the Austrian Parliament’s Budget Service (analyses of UG 22 Pension Insurance and UG 23 Civil Service Pensions, budgets 2025 and 2026), the Old-Age Provision Commission at the Ministry of Social Affairs (report on the long-term development of the statutory pension insurance 2023 to 2070), the Ministry of Social Affairs (monitoring of pension take-up 2019–2024), Statistik Austria (EU-SILC 2025), and for the German comparison figures from the Federal Ministry of Labour and Social Affairs and the Federal Statistical Office (Destatis). As of August 2026, subject to changes in the data.