Severance pay new when changing jobs: Payout or continue investing?

Changing jobs often raises another question alongside notice periods, remaining vacation, and new contracts: What happens to the 'Abfertigung neu' (new severance pay)? Many employees believe they must have the accrued balance paid out immediately or that they would lose it if they resign themselves. Neither is true. The capital is generally preserved, but a payout is not possible immediately in every type of termination. And even if it is possible, it does not automatically have to be the best decision.

This guide explains the new severance pay when changing jobs for employees in Austria. It shows when you are allowed to dispose of it, which deadlines apply, and how to objectively compare payout, continued investment, transfer, and retirement provision.

The quick decision before changing jobs

The balance does not expire: Even in the case of resignation, the accrued capital remains in the company pension fund (BVK).
Payout is not always possible immediately: The decisive factors are at least 36 contribution months and the way the employment relationship ends.
You do not have to pay it out: Depending on the requirements, continued investment, transfer to the new employer's BVK, or a transfer to a retirement provision institution are also possible.
The deadline is usually six months: Without a timely declaration, the money remains with the previous BVK and continues to be invested.
Liquidity has a price: In the case of a payout, six percent wage tax is generally deducted.

Therefore, check your payout entitlement first and only then the economically appropriate use. Anyone evaluating the new contract at the same time will find a supplementary checklist in the jobspot.at guide on checking a job offer.

How the new severance pay works

For employment relationships that generally began on or after January 1, 2003, the 'Abfertigung neu' system applies. Since 2008, many freelance service contracts have also been included. The employer pays 1.53 percent of the monthly gross salary, including special payments, to a BVK via the responsible health insurance provider. The first month of employment is generally contribution-free.

Unlike the 'Abfertigung alt' (old severance pay), the entitlement grows continuously with the contributions. The amount therefore does not depend on a rigid number of monthly salaries. Simply put, the balance results from paid contributions plus investment results minus permissible costs. In the event of a later disposal, a statutory capital guarantee applies to the paid contributions.

Which BVK is responsible must be stated in the employment contract or service note. The payslip should also show the assessment basis and the BVK contribution. Anyone who discovers ambiguities there can simultaneously use the jobspot.at guide on checking the payslipcandied cherries or alternatively a dollop of jam on the whipped cream peaks

The money is not lost even if you resign yourself

The most important principle is often the 'backpack principle': The balance accompanies you through various employment relationships. If you resign yourself, are dismissed for cause, or leave without good reason, you are generally not allowed to dispose of the money immediately. However, it remains in the account of the previous BVK and continues to be invested.

If a later employment relationship ends in a way that justifies a payout and the required contribution months have been reached, the right of disposal can also extend to older balances. Resignation therefore usually only blocks the immediate payout; it does not destroy the capital already saved.

When a payout is possible

For regular disposal, there must generally be at least three years of deposits or 36 contribution months. The months can come from several employment relationships. You therefore do not have to have been employed by the same employer for three years. It is also relevant whether enough contribution periods have passed since a previous disposal.

If the contribution period is met, a payout can be possible in particular if:

the employer terminates the contract,
a fixed-term employment relationship ends due to the expiry of time,
the employment relationship is terminated by mutual agreement,
a dismissal without fault occurs,
you are entitled to resign prematurely or
you resign yourself during statutory parental part-time work.

There is generally no immediate right of disposal in the case of ordinary resignation, dismissal for cause, unauthorized departure, or missing 36 contribution months. Special rules apply, among other things, to retirement, death, parental part-time work, and long contribution-free periods. In the case of a disputed type of termination, legal clarification should take precedence over a quick BVK decision.

Four options for the accrued balance

1. Payout as a capital amount

The payout creates immediately available liquidity. This can make sense if there is a real financing gap or if expensive debts are to be reduced. The BVK generally deducts six percent wage tax from the gross amount. In addition, it should be remembered that the money no longer works for retirement provision within the BVK system afterwards.

A payout should therefore not take place simply because it is possible. Compare the net amount with the specific purpose. 'Having the money in the checking account' is not yet a financial plan of its own.

2. Continued investment in the previous BVK

Anyone who does not submit a declaration or consciously wants to continue investing leaves the capital in the previous BVK. This is administratively simple and maintains the long-term provision function. This variant is particularly useful if no short-term liquidity is needed and the annual account statements are transparently understood.

Check the investment result, costs, and guarantees over several years instead of just based on a single good or bad year. Past results are no guarantee for the future.

3. Transfer to the new employer's BVK

A merger can improve the overview. In the case of a regular disposal, the entire balance may be transferred to the new employer's BVK. Blocked old balances can also be transferred under certain conditions if they have been contribution-free at the old BVK for at least three years.

The transfer is not an automatic return advantage. However, it reduces scattered accounts and makes it easier to keep track of claims, documents, and beneficiaries.

4. Transfer to a retirement provision institution

The law also allows for transfer to a pension fund, company collective insurance, or certain supplementary pension insurance policies under certain conditions. This variant ties the money more strongly to retirement provision. Before making a decision, the costs, payout conditions, guarantees, and tax consequences of the specific product must be checked.

What a payout means net: a simple example

Assume the current BVK statement shows an available gross severance pay of 10,000 euros. In the case of a capital payout and a wage tax deduction of six percent, 9,400 euros would be paid out in simplified terms. The example does not take into account any special features of the individual case, but makes the immediate difference between the account balance and the available net amount visible.

This calculation is not enough for the decision. Anyone who continues to invest the money does not know the future return, but keeps the entire balance in the provision system. Anyone who pays out receives 9,400 euros immediately and can use it to finance a specific purpose. The correct comparison question is therefore not 'Is a payout allowed?', but 'What verifiable benefit does the net amount provide today compared to further provision?'

An example: If the payout pays off a short-term loan with very high interest, the avoided interest expense can be economically relevant. If, on the other hand, the money is to lie on a non-interest-bearing account without a plan, the advantage is less clear. For a reliable comparison, loan costs, existing emergency funds, planned time horizon, and the conditions of the BVK belong on a common overview.

Which option fits which situation?

There is no universally best solution. The following decision matrix provides initial orientation:

Acute financial gap: A payout can be justifiable if the net amount solves a clearly defined problem and no cheaper reserve is available.
Stable job change without need for money: Continued investment or transfer preserve the provision purpose.
Several small BVK accounts: A permissible merger can simplify administration and control.
Long investment horizon: Compare costs, risk, guarantee, and expected use until retirement instead of just the current account balance.
Unclear type of termination: Clarify entitlement and deadline legally first, then dispose.
Planned retirement: Coordination with the start of retirement, tax consequences, and existing provision deserves individual advice.

For larger amounts, the decision should not be based on a single key figure. Liquidity reserve, debt interest, time horizon, risk-bearing capacity, and other provision components should be considered together.

Using the six-month deadline correctly

If there is a right of disposal, you must generally inform the BVK in writing within six months after the end of the employment relationship what should happen to the severance pay. If no declaration is made, the balance remains in the previous BVK and continues to be invested. It does not disappear.

In the case of labor court proceedings regarding circumstances relevant to severance pay, a special deadline rule may apply. Therefore, document the end of the employment relationship, the type of termination, and all letters. Anyone who is still preparing their resignation should also coordinate deadlines and handover with the guide on resignation interview when changing jobs.

Seven steps for a clean decision

Identify BVK: Check employment contract, service note, and last payslip.
Request account balance: Use the current BVK account statement and, if necessary, record balances with several funds.
Record type of termination: Employer termination, resignation, fixed-term, and mutual agreement do not always lead to the same immediate right of disposal.
Check contribution months: Add up contribution periods from different employment relationships and take into account previous disposals.
Calculate net amount: Compare the gross balance with the six percent wage tax in the event of a payout.
Compare options in writing: Note the purpose, costs, time horizon, and consequences of each variant.
Declare on time: Send the chosen disposal to the BVK in a verifiable manner and keep the confirmation and settlement.

You should collect these documents before the declaration

A good decision often fails not because of the law, but because of incomplete data. Therefore, create a small digital or printed BVK folder. It should at least contain the employment contract or service note, the last payslips, the letter regarding the termination of the employment relationship, current BVK account statements, and existing documents from previous employers.

On the account statement, compare the employer, the contribution period, the sum of the contributions, the investment result, shown costs, and the total available amount. If employment months or employers do not match your documents, clarify the discrepancy with the BVK, employer, or health insurance provider before making a disposal. A missing month can be decisive at the threshold of 36 contribution months.

For several BVKs, a simple table with fund, account number, last contribution, balance, contribution-free duration, and contact method is sufficient. This way, you can see which old entitlements have already been contribution-free for three years and could be considered for a merger. Also, note the end of the current employment relationship and the last day of the six-month deadline as a concrete calendar date.

Three typical practical cases

Case 1: Resignation for a better job

An employee resigns and starts with the new employer without a long interruption. The balance remains with the previous BVK. An immediate payout is generally not possible for this reason. Later, a right of disposal can arise, or after a sufficiently long contribution-free period, a transfer to the current BVK can be checked.

Case 2: Mutual termination after four contribution years

An employee agrees to the end of the employment relationship and has collected more than 36 contribution months. He can generally choose between payout, continued investment, transfer, and a permissible retirement provision solution. Before the payout, he compares the net amount with his actual liquidity requirement.

Case 3: Fixed-term contract ends after 18 months

The type of termination would generally be payout-friendly, but the required contribution months are missing, provided no older periods can be credited. The capital is preserved and continues to be invested. As soon as all requirements are met later, it can be disposed of.

Common mistakes regarding the new severance pay

Confusing resignation with a loss of the balance.
Only considering the duration with the last employer instead of all contribution periods.
Letting the six-month declaration deadline pass, even though an active transfer was planned.
Equating the gross amount with the actual payout amount.
Not including several BVK accounts in the decision.
Choosing a payout without a concrete purpose.
Acting without advice in the case of a disputed dismissal or resignation declaration.

FAQ on new severance pay when changing jobs

Do I lose the new severance pay if I resign?

No. The balance is generally preserved. However, in the case of an ordinary resignation, there is usually no immediate right of disposal.

Do the 36 contribution months have to be with one employer?

No. Contribution periods from several employment relationships are generally added together. Previous disposals and parallel employment relationships can influence the check.

What happens if I don't decide anything for six months?

The balance remains with the previous BVK and continues to be invested. However, a planned immediate payout or transfer will not be carried out without a declaration.

How high is the tax on payout?

Six percent wage tax is generally deducted from a capital payout. For special cases and alternative transfers, the concrete tax consequences should be checked.

Can I merge old BVK accounts?

Yes, under legal conditions. Old entitlements that have been made contribution-free can be transferred to the current BVK, especially after a three-year contribution-free period.

Conclusion: Check entitlement first, then decide on the money

The new severance pay when changing jobs is not a bonus that must be consumed immediately, and not a balance that disappears upon resignation. It is a personal provision entitlement with clear disposal rules. Check the type of termination, contribution months, account balances, and deadline before making an economic decision.

Anyone who compares payout, continued investment, transfer, and retirement provision based on their own purpose makes the better choice. In the case of disputed labor law circumstances or large amounts, the Chamber of Labor, trade union, tax consultancy, or independent financial advice should be involved.

New severance scheme when changing jobs: cash out or keep investing?

The quick decision before changing jobs

How the new severance pay works

The money is not lost even if you resign yourself

When a payout is possible