New severance payment scheme for employees and freelancers

General information

For employees whose employment relationship began on or after 1 January 2003, the Betriebliches Mitarbeiter- und Selbständigenvorsorgegesetz (BMSVG) and thus the Abfertigung NEU applies.

Since 1 January 2008, freelancers have also been included in the Abfertigung NEU. This includes all freelance employment relationships that are subject to compulsory insurance under the Allgemeines Sozialversicherungsgesetz (ASVG) and that last longer than 1 month. This also applies to freelance employment relationships existing at 31 December 2007.

Enterprises affected

All employers

Requirements

An entitlement to the disposal of the Abfertigung NEU exists if 3 years of payments have elapsed since the first contribution payment or the last disposal (contribution periods with different employers must be added together) and in the event of:

• termination by the employer;
• unjustified dismissal or dismissal without fault;
• entitled premature departure of the employee (this also includes maternity or paternity leave);
• termination by mutual agreement;
• death of the employee (in this case the spouse or registered partner and the children for whom family allowance is received are in any case entitled to payment of the severance pay – death benefit);
• termination by expiry of time.

Deadlines

The employer’s obligation to pay contributions begins with the start of the employment relationship, with the first month being exempt from contribution.

The employee must notify the occupational pension fund of the desired disposal in writing within 6 months of termination of the employment relationship. The occupational pension fund must comply with the disposal made within 5 working days of the end of the second calendar month after the notification thereof.

Competent authority

The employee’s claim is directed against the occupational pension fund.

There are eight occupational pension funds in Austria. As a rule, the employer decides with which occupational pension fund to conclude a contract.

Procedure

The Abfertigung NEU is financed by means of a defined contribution system. The employer pays a contribution amounting to 1.53 per cent of the monthly salary and any special payments. This amount is collected by the respective competent health insurance institution and forwarded to an occupational pension fund selected by the employer. In contrast to the stepwise increase provided for in the Abfertigung ALT (old severance payment scheme), the entitlement from the Abfertigung NEU grows continuously.

The accumulated capital is preserved in all types of termination of employment, regardless of the duration of the employment. A loss of entitlement to severance pay, as in the case of the Abfertigung ALT (e.g. in the event of resignation), no longer occurs.

If the employee has a right to dispose of the severance pay, he or she has the following options:

• payment of severance pay;
• continued investment of the severance pay in the same occupational pension fund;
• transfer of the severance payment to the occupational pension fund of a new employer;
• transfer of the severance payment to a pension scheme (e.g. pension fund).

It is essential that the severance pay entitlement acquired through the occupational pension fund (the resulting capital amount) is secured by a capital guarantee at all times. This means that if the employee has disposal of the capital amount, he or she will in any case receive at least the capital sum paid in by the employer.

If the employee does not make a declaration of disposal, the severance payment claim (the accumulated capital) is converted into a non-contributory severance payment account; the accumulated capital continues to be invested by the occupational pension fund as before.

Costs and fees

There are no charges payable.

Further information

There is no right to dispose of the Abfertigung NEU in the event of:

• termination by the employee (except in the case of resignation during part-time employment under the Mutterschutzgesetzv – MSchG or the Väter-Karenzgesetz – VKG)
• resignation without good cause;
• fault of the employee in the dismissal and/or;
• the absence of 3 payment years. 

• Company pension scheme for employees and the self-employed (→ BMAW)^{German text}
• Contact details of the occupational pension funds (→ ÖGK)^{German text}
• Severance pay calculator (→ AK)^{German text}

Legal bases

Betriebliches Mitarbeiter- und Selbständigenvorsorgegesetz (BMSVG)

Link to form

There is no form available.

Assistance and problem-solving services

Further service point

Company pension funds platform (→ WKO)^{German text}