Half-time scheme introduced for older workers

The Austrian social partners agreed in May 1999 on the implementation of selected measures proposed in the recent "pact for older workers". They hope thereby to halt the inexorable rise of unemployment amongst the over-50 age bracket, though a reversal arguably seems out of reach.

On 28 May 1999, the Austrian social partners agreed on the details required to unblock implementation of a half-time work scheme for older workers, in which the wage is topped up from unemployment insurance funds to 70% of the previous full-time wage (AT9711145N). There will be two versions of the scheme, which it is hoped will attract 2,500 participants.

The Austrian Trade Union Federation (Österreichischer Gewerkschaftsbund, ÖGB) and the Federal Chamber of Labour (Bundesarbeitskammer, BAK) had demanded that men be entitled to participate in the scheme at 57 and women at 53. They had insisted that registered unemployed people must be recruited to replace them, making it a worksharing scheme. However, the Austrian Chamber of the Economy (Wirtschaftskammer Österreich, WKÖ) wanted the age limits to be lower, at 55 and 50 respectively, and for no replacement to be compulsory. The compromise agreement allows for employees either to switch by agreement to half-time work at the higher age (57 and 53) without replacement, or to be entitled to move to half time at the lower age (55 and 50) with replacement. Replacements may be either registered unemployed people or new apprentices. On balance, it is hoped, the savings accruing from ceasing to pay benefits to the previously unemployed replacements will pay for the scheme.

The measure forms part of the recent "pact for older workers" (Pakt für Ältere) (AT9903135F). Some of the other changes envisaged in the pact will also be implemented. Minimum training leave (AT9710139N) will be reduced from six months to three to entice more people to participate, and participants over 45 will have the time spent on such leave added to their length of service for pension entitlements. Furthermore, workers over 50 will retain unemployment benefit entitlements in line with an earlier, higher wage, if they later accept lower-paid employment instead of continued unemployment. Minor adjustments are also being made to flexible pensions - a scheme with only about 1,000 participants so far - and to the "solidarity premium" model (AT9711146N) which is also hardly being utilised. The bonus/penalty system is being left unchanged.

In 1999, so far, unemployment has been declining - by between 3% and 11% - for people in the age groups below 50 but it has continued to rise amongst those over 50.

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