Partial retirement has become more complicated in Austria in 2026.The subsidized reduction in working hours can still allow a gradual transition into retirement, but the rules are changing step by step. For agreements with a start date in 2026, a shorter maximum duration applies than before. Since July 1, new thresholds for employment periods subject to unemployment insurance also apply.
For employees, it's therefore not just a question of whether reduced working hours are generally possible. Crucial are the correct start date, the model, the previous insurance periods, possible secondary employment and the written agreement with the employer. This overview explains the most important points for Austria and shows which questions should be clarified before submitting an application.
Note: The requirements depend on the personal pension date, the model and the specific agreement. For a binding assessment, AMS, Arbeiterkammer, Pensionsversicherung or the responsible HR department are the right points of contact.
What is changing in partial retirement in 2026
Statutory partial retirement is an agreement between employee and employer. Working hours are reduced, current income is supplemented by a wage compensation, and under certain conditions the AMS reimburses the employer for part of the additional costs. The subsidy is therefore not automatically an individual pension, but is tied to labor and social law conditions.
The most important change concerns the subsidized duration of continuous partial retirement. According to the information on oesterreich.gv.at the following transitional limits apply:
- If the agreement begins in 2026, partial retirement pay is possible for a maximum of four and a half years.
- If it begins in 2027, the maximum duration decreases to four years.
- If it begins in 2028, at most three and a half years are planned.
- From 2029, the subsidized maximum duration is generally three years.
The earliest possible entry also changes. During the transition period, continuous partial retirement can in principle still start earlier before the statutory pension age. From 2029, access is more closely tied to three years before the statutory pension age or the requirements for a corridor pension. For women, the gradually increasing statutory pension age must also be taken into account.
Why the start date in July 2026 is important
For the required employment periods subject to unemployment insurance, the agreement's start date counts. The previous threshold of 780 weeks will be gradually raised until the end of 2028. According to the current overview of the Wirtschaftskammer Österreich the following stages apply for continuous agreements, among others:
- Start after March 31, 2026: 796 weeks
- Start after June 30, 2026: 804 weeks
- Start after September 30, 2026: 812 weeks
- Start after December 31, 2026: 820 weeks
- From 2029: 884 weeks, i.e. 17 years
Anyone who starts a new agreement in July 2026 must therefore already reckon with the threshold of 804 weeks. That's not simply 15 or 17 calendar years, because individual periods can be evaluated differently. The reference period is generally 25 years; certain childcare periods and periods of self-employment can influence the assessment. A personal insurance record query is therefore more sensible than a rough calendar calculation.
Continuous model or block time?
With continuous partial retirement, working hours are reduced for the entire duration. Someone who, for example, previously worked 40 hours can permanently reduce their weekly hours and receives a legally prescribed wage compensation for the loss of income. The exact amount depends on the extent of the reduction and the legal requirements.
In the block time model, the reduced working hours are first worked in. In a later leisure phase, the accrued time is consumed. A simple example would be an agreement in which work continues initially and is followed by a longer paid leisure phase. This model can be attractive for employees but is less heavily subsidized for employers than the continuous variant.
The Chamber of LabourNotes that a blocked partial retirement can still run longer under the transitional rules. For employers, however, the subsidy for the block model decreases stepwise. According to the current WKO overview, the compensation for expenses for a start date in 2026 is 27.5 percent, 2027 20 percent and 2028 ten percent. From 2029 there is no corresponding subsidy for newly starting block time agreements.
Observe the ban on secondary employment from July 1
A particularly important change concerns additional employment. For partial retirement agreements that begin from January 1, 2026, secondary employment with other employers is generally no longer permitted. This also affects marginal jobs. The transitional period for certain existing employments ended on June 30, 2026.
An exception may apply if the secondary employment was carried out regularly and for at least four weeks in the last year before starting partial retirement. Self-employed activities remain generally possible according to the published information, but not with the partial-retirement employer. Whether a specific activity falls under an exception should be checked in writing before the start.
The WKO information sheet on the changes from July 1, 2026 describes the transitional provisions. The AK-Information zur Altersteilzeit recommends assessing secondary employment not only by extent but also by timing and legal form.
What requirements employees should check
Before the conversation with the employer, employees should collect the most important key data. These include date of birth, the expected statutory pension date, possible entitlements to a corridor pension and the insurance record. The current extent of employment is also relevant. For a subsidized continuous partial retirement, previous working time should generally not be more than 40 percent below the statutory or collective-agreement standard working time.
After that, the desired reduction should be planned realistically. Partial retirement is not a blanket halving of salary for half the work. In addition to the reduced earnings, wage compensation, social insurance, special payments, the collective agreement and the specific design of working time all interact. Those who need reliable household planning should have the expected amounts calculated in writing before signing.
These questions are also important:
- Does the agreement still start in 2026 and what maximum duration applies?
- Do I meet the required number of insurance weeks at the actual start date?
- Will working time be reduced continuously or organized as a block model?
- Which secondary employments or self-employed activities currently exist?
- How are vacation, special payments, severance pay and overtime handled?
- What happens if the pension date or personal plans change?
What employers and HR departments need to prepare
For employers, partial retirement is not just payroll. Before the agreement, personnel needs, transfer of knowledge, representation and the later transition to pension must be planned. This is especially true in small businesses, where reduced working hours immediately affect the distribution of tasks.
The HR department should first clarify whether the subsidy requirements for the specific employee are met. After that, the model, weekly hours, duration, wage compensation, vacation processing and the application to the AMS must fit together. The AMS-FAQ zur Altersteilzeit explain, among other things, the difference between continuous and blocked working time and point out that overtime above the marginal employment threshold can be problematic.
The replacement need must not be underestimated either. With the continuous model, a replacement hire or internal redistribution may be necessary for the entire duration. A good agreement therefore not only records the hours but also handovers, responsibilities and how to deal with changes in the business.
Partial retirement is not the same as partial pension
Since January 1, 2026 there has also been the partial pension. It allows, under certain conditions, a reduction in working hours while simultaneously receiving part of the pension. Partial retirement and partial pension are, however, different models and cannot be drawn at the same time.
For the decision, it therefore depends on the goal: Should a subsidized working time agreement with wage compensation be planned up to a transition to pension, or is there already an entitlement to a pension and the working time should be gradually reduced afterwards? The Pensionsversicherung, the AMS and the Arbeiterkammer can compare the options based on the personal insurance record.
Checklist for the discussion about partial retirement
- Determine the key date:Record statutory pension age, corridor pension and desired start in writing.
- Check insurance periods:Request the insurance record and compare the number of weeks applicable to the start date.
- Choose a model:Compare continuous partial retirement and block time with regard to income, leisure and business operations.
- Disclose secondary employment:Have employment relationships, marginal jobs and self-employment checked in advance.
- Calculate finances:Document salary, wage compensation, social insurance, special payments and severance consequences.
- Agree in writing:Clearly record working time, duration, vacation, handover, overtime and how to handle changes.
- Secure the subsidy:Clarify the application steps with the AMS or HR department before working time is actually reduced.
Conclusion: In 2026 the precise plan counts
Partial retirement remains a possible way in Austria to make the transition into pension more predictable. But in 2026 several details are crucial: the continuous maximum duration drops to four and a half years, the required insurance period increases to 804 weeks from July and additional employments must be examined especially carefully.
Anyone considering partial retirement should therefore not simply look for a blank form. Better is a joint discussion with the employer, AMS and an advisory office. Check the start date, the model, the insurance record and the financial effects before signing a binding agreement.
Further information
On jobspot.at you will also find supplementary information on Jobs und Bewerbung ab 50, on Teilzeitbeschäftigung and on Kollektivvertrag vor einer Jobentscheidung.
