The Clearinghouse on International Developments in Child, Youth and Family Policies

at COLUMBIA UNIVERSITY

Austria

(Last updated October 2005)

Introduction and Overview

Austria is a federal republic with 9 provinces and a little over 8 million inhabitants (2003), about the same size population as Sweden. As an Austrian family policy expert stated in his report to the European Observatory, the federal constitution does not define an explicit Austrian family policy except to state that population policy implemented through family allowances are the responsibility of the federal government (Badelt, 1998; Badelt, 1997). He argues that no political party at present would define family policy so narrowly. Whether part of explicit or implicit family policy, Austrian family policy today, would be defined as including (in addition to population policy and family allowances): family law, labor market and employment policy, health policy, maternity and parental leave policy, and higher education at the federal level and it would include early childhood education and care, primary school, housing policies, and income transfers for children and families, at the provincial level.

Explicit goals of family policy include: the ability to lead the kind of family life that people prefer including the right to choose between paid work and family work; the ability of parents to afford children when they wish to have them; help in reconciling work and family life; and support in creating a partnership between men and women, based on equality (Schattovits, 2003).

Austria's family policy needs to be seen in the context of a number of long-term developments including demographic and social trends, changes in family law, and financial constraints resulting from Austria's entrance into the European Union (EU) and the European Monetary Union (EMU). Austrian family allowances were raised in the early 1990s, and a second year of parental leave was introduced. However, the family benefit package was cut in 1995 and 1996 under the financial pressures imposed by entering the EU and the EMU. A new family policy package came into effect in 2000, enacted in response to a constitutional court decision requiring that the income tax system take more account of the costs of child rearing; this package will more than compensate for the earlier cuts. Austria and Germany are the two countries whose constitutions enable the court to instruct government, specifically, to better adapt income tax or child benefits to the actual costs of childrearing.

Schattovits (2003) notes that "the 1994 International Year of the Family provided the critical impetus to develop family policy as a separate area of politics", p. 4 One result was the establishment of a concept of a family program for Austria, using contributions from 15 working groups. The program set out the need for family policy, identified objectives and major topics of concern, and launched a national discussion. The "2000 Family Package" adopted at the end of the 1990s more than compensated for the earlier reductions in family allowances and doubled the child credit (about $50 per child per month) beginning with the first child.

Austria's family benefits (family allowances and maternity and parental leaves and benefits) remain generous by EU standards but its overall policy package supporting the reconciliation of work and family life is low, largely owing to the limited availability of early childhood education and care services. Family benefits constituted 3.03% of GDP in 1998 (Bertelsmann, 2003).

According to Schattovits (2003) "Austria is in possession of a special instrument to finance specific pre-defined supportive measures to benefit families." (p.7) Introduced in 1954, funded by a payroll tax of 4.5 percent, this Family Fund funds the family allowances, the parental leave benefit, the mother-child benefit linked to prenatal care visits, and since 2001 has funded some family research studies.

From 1988 to 1994, the Austrian Institute for Family studies held the coordinating role for the European Observatory on Family Matters (formerly, the European Observatory on National Family Policies) but it is unclear whether it had any impact on Austrian family policies -- or on EU policies. Since the end of 2004, the commission has replaced this observatory with an observatory on the social situation of Europe. This will include a core network of four research organizations focused on the following topics: demography; social exclusion and income distribution; social capital; health status and living conditions. Each of these organizations will produce an annual repot which will be used as input for an annual report of Demography and the Social Situation of Europe. Austria has signed the UN Convention on the Rights of the Child and the Convention is viewed as raising children's issues high on the national political agenda.

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Highlights

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Government Agencies

At the federal level, the formal responsibility for family policy lies with the Ministry for Social Security, Generations, and Consumer Protection. This Ministry has responsibility for administering the Family Allowance Fund, but the major decisions regarding benefit levels, for example, are made by the Ministry of Finance. The administration of the parental leave policy and the parental leave benefit was in the Ministry of Labor and Social Affairs, but under the present government is in the Ministry of Women and Social Affairs. At the provincial level, the formal responsibilities for family policy is usually located in a special administrative unit, often combined with social affairs.

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Demographic and Other Social Trends

Austria has a population of a little over 8 million (2003), 78 percent of whom are Catholic. Austria is among the countries with the lowest birth rates in Europe (1.3). The population has become somewhat more diverse in recent years as a result of the political upheavals in Eastern Europe and the Balkans and the entry of refugees and immigrants.

Recent demographic trends in Austria are very similar to those in the rest of the EU: an increasing proportion of elderly in the population (15.5 percent) and a declining proportion of children (16.5 percent under 15 in 2003); higher rates of divorce and declining rates of marriage; later ages for first births; and declining fertility (1.3) in 2003 (European Commission, 2004). One special feature is that non-marital fertility in Austria has traditionally been very high by European standards and still is (31 percent of all births were to unmarried women living in their parents' homes and not cohabiting with a male partner). Regional differences are very pronounced and have been, historically. However, cohabiting relationships are only a recent phenomenon in Austria. While it existed earlier for widows (who did not want to lose their pension) it has only recently emerged as an important life style for young couples, usually as a prelude to marriage rather than an alternative (Prinz, 1998).

Unemployment rates are low, about 3.5 percent for men and 3.8 percent for women in 2003.

Labor force participation of women with young children remains low by EU standards. 41% of all women with children under age 7 are in the labor force and parents with at least one child under 7 have the right to work part-time. About 20 percent of all families with children are single parent families.

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Social Protection

Classified, like the Netherlands, as among the continental, "conservative" corporatist welfare states whose "social partners" (business, labor, government) strive for social and economic policy consensus rather than conflict, Austria has traditionally belonged to the group of western European welfare states with a generous social protection system. Following the original Bismarck model of a contributory social insurance system, its federal structure complicates its social policy. Nonetheless, it is the federal government that has primary responsibility for the basic social protection system: old age, retirement, and survivor benefits; disability benefits; workers compensation and unemployment benefits; health insurance; and family benefits, while local government has primary responsibility for education including ECEC.

Austria's entry into the EU in 1995 and the EMU subsequently, created significant financial pressures on the system and led to cuts in family policies, but by the end of the century the benefits had largely been re-instated. In 2000, social protection accounted for almost 30 percent of GDP, slightly above the EU average of 27.7 percent, and 10.6 percent of its social expenditures were for family benefits, a share that was not very different from that of the Nordic countries and well above the EU average of 8.2 percent.

Family benefit cash expenditures were 1.92% of GDP in 1998 and 1.11% for family services for a total of 3.03% of GDP, among the most generous of the OECD and EU countries (Bertelsmann, 2005). By 2000, these expenditures was still 3% of GDP. But in 2001, there was a slight decline to 2.9% of GDP (OECD Social Expenditure Database, 2005).

Using 50 percent of median income as the poverty threshold, Austria's child poverty rate of 10.2 percent places it in the middle of the advanced industrialized countries, far higher than the Nordic countries and higher than Germany and France but lower than the U.S., UK, and Canada, among others. Households with children are especially vulnerable to poverty and half the low-income households in the mid 1990's had at least one child.

Since January 2005, 48 months of child care (previously 30 months) are taken into account for pension eligibility. In case of multiple childbirth, 60 months are counted.

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Child, Youth and Family Policy Regimes

Maternity, Paternity, Parental, and Family Leaves

Maternity Leaves are job-protected and paid leaves from employment for working women at the time of pregnancy and childbirth, for eight weeks before and after the delivery date, for a total of 16 weeks; mothers are required to take maternity leave. While on maternity leave women receive a cash benefit replacing 100 percent of their wages. Almost all mothers take this benefit.

As of January 1, 2003, at the end of the maternity leave, mothers or fathers can take an extended parental leave until the child's second birthday, if each parent (overwhelmingly the father) takes at least six months of the leave. If it is taken only by the mother, the parental leave is limited to 18 months. Less than 2 percent of fathers take advantage of this policy. The benefit is income-tested at a relatively generous level and is paid at a flat monthly rate, through the unemployment insurance fund. Take-up is very high. Parents who choose to work part-time while on leave receive a lower benefit. Up to 5 years (60 months) of the leave count towards the individual's old age pension.

Parents can take paid and job-protected leave to care for an ill child under age 12 or for a very young, ill or handicapped child.

According to Bertelsmann (2001, Issue 5, pp. 28-29):

Beginning in January 2002, a universal child-care benefits reform went into effect. Apart from an increase in benefit duration and amount, the new system is available to more families.

Austria already has an extensive parental leave system allowing parents up to 24 months of leave if both parents use at least six months. However, the existing parental leave regulation does not offer strong incentives for fathers to stay at home. Less than 2 percent of the fathers made use of their right to parental leave. Problems in the existing regulation concern the lack of child-care facilities after the parental leave period, especially for children under the age of three, and problems for women returning to the labour market. Although there is protection against dismissal during the parental leave period up until four weeks after returning to the former job, many women still lose their jobs or have to find new employment because they want to reduce their working hours.

The new policy is being implemented as a "family benefit," compared to the previous parental leave system which was implemented as an "insurance benefit" for employees. This change expands the eligibility from employed parents to the unemployed, students, and to parents who have decided to take care of their child full-time. With the introduction of the new child-care benefits, one parent will receive € 426 per month (previously € 410) until the child's third birthday if the income of the parent is less than € 14,600 per year. The duration was increased from 24 to 36 months under the condition that each parent participates for at least six months; otherwise the maximum is 30 months. For pension insurance eligibility, 18 months of parental leave are counted. The fund for the compensation of family burdens (Familienlastenausgleichsfonds), which is mainly supported by employer contributions, will be used to finance the reform.

There are fears that the reform reinforces traditional gender roles. There are no additional incentives for men to take parental leave, and the previously available possibility to share care duties through part-time leave by both partners is no longer supported. In general, it is argued that the longer leave period will cause problems for those re-entering the labour market. The extension of the earning cap during parental leave will not affect many women, as indicated by the low rates of those taking part-time parental leave. Women with higher paid jobs often used it, but for this group the € 14,600 earning cap translates into less than 15 hours of working time per week. This actually worsens their situation. Whether less-qualified women can find jobs and are able to adapt their care duties is an open question. Furthermore, parents who choose to work part-time during parental leave will completely lose their protection against dismissal. There is also the fear that the child-care benefits will lead to lower subsidies for child-care facilities. Experts point out that the reform is not as important as the political parties make it out to be. The problems associated with the reconciliation of work and family will not disappear, especially for families with children older than three. The reform provides incentives for women to stay at home for a longer period of time or to work in low-paying jobs. This will reinforce the gender segregation on the labour market and the traditional division of paid and un-paid work between men and women.

98 percent of all those taking parental leaves are women, and 96 percent of all women who qualify for the leave take it while only 2 percent of qualified fathers do (Bertelsmann, 2003).

A study published in March 2003 questions the effectiveness of Austria's recently introduced childcare benefit scheme in terms of women's chances to re-enter employment after parental leave, claiming that it does not contribute to increasing women's labour market participation. The government has defended the scheme, but the opposition parties and organized labour are calling for amendments and new measures to improve women's employment situation. Recently, the right to use the leave to cover part-time work for a longer period of time was enacted (Bertelsmann, 2005).

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Early Childhood Education and Care (ECEC)

The Austrian ECEC system is a matter for Austria's 9 federal provinces. Each province has its own law (Kindergarten Law).

Institutional day care began at the end of the 18th and beginning of the 19th centuries, when women first began to enter the labor force as a result of the Industrial Revolution (OECD, 2005). Children were largely left to care for themselves, leading to an increase in neglect and delinquency. Religious and philanthropic institutions were established to prevent neglect and delinquency and to provide care for the children of the working class. The first Froebel-type kindergarten was established in Vienna in 1863, targeted on middle class families and designed to enhance children's intellectual and social development.

Currently, the major focus of ECEC is on the 3-5 years olds and 85 percent of this age group is enrolled in ECEC, largely preschools (kindergarten)  with a small group in creches (5 percent) (serving the 0-3 years olds primarily) and childminders (3.5 percent). Coverage in 2002/03 of the 3-5 years olds was 85 percent (94 percent of 5 years olds, 88 percent of 4 years olds, and 82 percent of 3 years olds), most in full day programs. In contrast, only about 11 percent of the 0-3 years olds are in ECEC programs either in a creche or with a family day care provider (childminders). Low income families and immigrant families are those who are less likely to participate.

Kindergarten for the 3-5 years olds are viewed as providing education and care and creches, for the 0-3 years olds, are also viewed as promoting children's social, emotional, physical and cognitive development. Programs are both public and publicly-funded and privately administered. Parent fees cover about 20 of ECEC expenditure in 2001. Parent fees are about 145 Euros per child per month for creches and 60 Euros for kindergarten.

According to Richter and Pfeiffer (2001), "Child care remains a major problem, however. Sufficient, extensive child-care provisions are a key issue with great impact on the employment of women. So far, the focus has been on facilities for children between three and six years of age. However, more child-care facilities for children under three would also make it easier for women to take up employment. Another important area is child care for those aged six and above" (pp. 4-5). They also note that child care policy must be linked with parental leave policies (as discussed above) and they note that child care is "the most prominent factor for reconciling family and work" (p. 5).

Austria is a participant in the second wave of the OECD thematic review of ECEC policy and programs.

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Child and Family Allowances

Family allowances in Austria are a universal cash benefit provided to families, based on the presence, number, and age of children living in Austria, beginning with the first child. They are the single most important benefit going to families with children (Badelt, 1997). They are financed through employers' contributions and government payments out of general revenue. In 2004 they were about 105.40 Euros per child per month for each child under 3, 130.90 for a first child aged 3 to 9, higher for a child aged 10-19, and still higher for children aged 19-26. A special infant allowance is paid in addition to the basic family allowance to moderate income families and a special benefit is also paid to moderate income families with three or more children. Still higher allowances are paid to disabled children, regardless of age. A supplementary allowance is paid to those receiving unemployment insurance benefits. In 2002 the family allowance for children aged 4 and older was raised again.

The Family Allowance Fund also finances a health program for children under age 4.

Child and Family Tax Benefits

The tax unit for income tax purposes is the individual. Since 1993 the most important tax benefit for families is a refundable tax credit that is higher for each subsequent child, refundable (non-wasteable), and that constitutes the equivalent of an additional family allowance. The credits were introduced as the result of a decision by the Constitutional Supreme Court, which ruled that the tax benefit for children had to be equal to the benefits provided children under social insurance or social assistance. However, the fact that there are higher credits per child for larger families continues to generate debate.

There are several other minor tax benefits including: a tax benefit for one-earner families; a tax benefit for lone parents; a tax benefit for the payment of child support; tax benefits which are tailored for employees in general, tax allowances for special kinds of expenditures such as private health or retirement insurance, housing loans, etc. The cost of ECEC for a single parent to enter labor market is also tax deductible.

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Child Support

The Federal government provides advance maintenance payments to minor children if the father who is legally obligated to make these payments fails to do so (Badelt, 1997).

In addition to concern with domestic violence, the issue of joint custody after divorce has become a major subject of discussion. Legislation adopted in 2001 enables divorce courts to grant legal custody to both parents and it is hoped that this will have positive effects for the children.

Opponents point out that the new custody law can be used as leverage during and after a divorce. Experts agree, and point out that the goal of improving the contacts between children and both parents after divorce can hardly be reached through custody law reforms. Women are disadvantaged because the children normally live with them, and the law can make some decisions more complicated.

Other Child Conditioned Income Transfers

Austrian families also receive economic support through various public social insurance schemes: Widows and orphans receive Survivors' Benefits when the primary breadwinner dies. They also may receive dependents' benefits under Workers Compensation and under unemployment insurance. Dependent family members are covered under the breadwinner's health insurance without any payment (Badelt, 1997).

Women who have custody of their children are rewarded by five years (previously four) notional contributions to the retirement old age pension scheme for each child, which makes it easier for them to obtain an old age pension of their own, rather than only as dependents (Badelt, 1997).

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Child and Adolescent Health

Austria has a national health insurance program which covers just about the entire population. Health policy for children is not a very visible subject in public policy discussions. Infant mortality rates are very low and immunization rates are high, but there seems to be some decline in parents bringing children to be vaccinated. Since January 1998 all recommended vaccinations are available free of charge to Austrian children until the end of compulsory school. Particular attention is paid to encourage pregnant women and women with very young children to go for regular medical check-ups. 

There is some evidence that childhood social deprivation is reflected in child health status, but this, too, is not an issue that is high on the national policy agenda. The birth allowance that had been provided to parents who had their child receive regular medical check-ups during their first four years was abolished in 1996. This has raised questions about possible negative consequences and is being monitored.

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School-Aged Children: Policies and Programs

About 6 percent of 6-10 year olds are in after-school programs.

 

Youth

Youth unemployment rates (under 25) are unusually low at 5.5 percent for women and 5.4 percent for men in 2002.

There is growing concern about youth and their risk-taking behavior, in particular t heir being exposed to smoking, alcohol, and drugs. Eighty percent of youth over age 15 smoke, about half regularly; 96 percent have tried alcohol; about 6 percent of those aged 14-22 consume alcohol daily. Between 15 and 20 percent have tried marijuana and an unknown percentage have experimented with hard drugs. Thirty percent of road accidents are to youth between the ages of 16-24. Teen non-marital pregnancy rates are down. In 1990, sex education of young people was declared an explicit goal of federal policy.

Click here to view in PDF format a table on the Ages at which children are legally entitled to carry out a series of acts in European Union countries. See Youth Policies section for definitions of terms used.

Reconciliation of Work and Family Life

According to Christoph Badelt (1998), former Austrian representative to the European Family Observatory, the issue of reconciling work and family life is one of the most intensely debated issues in Austrian family policy. He states "there are few subjects in family policy where basic ideological differences can be seen as overtly as here. While most political groups officially advocate freedom of choice between work at home and paid work and also endorse any political measure to make it easier to re-enter the labor market after a period of child related family work, there are significant differences in practical policy as to how far-reaching these measures should actually be and how much public money should be devoted to this purpose. These differences can easily be illustrated in the area of child care facilities, the political support for leave arrangements, etc" (p. 198).

Numerous measures have been enacted recently to facilitate the reconciliation of work and family life (Council of European Ministers, 1998):

  • as of January 1, 2000, credit for child rearing in calculating old age pension benefits.
  • the right of parents on parental leave to earn additional income without losing their parental leave allowances.
  • a subsidy to low income working parents
  • the right to part-time work
  • public funding childcare
  • protection against dismissal during or after birth or parental leave
  • caregiver leave for 1-2 weeks
  • the reduction of working hours for persons providing care for close relatives.
  • flexible, paid vacation arrangements.
  • efforts at encouraging firms to be more "family friendly" and the development of a family and work audit emphasizing the benefits of family friendly measures to firms.

Nonetheless, a high wage disparity between men and women remains.

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References

Badelt, C. (1998). Developments in general family policy in Austria in 1996. In J. Ditch, H. Barnes, & J. Bradshaw (Eds.), Developments in national family policies in 1996. Brussels: Commission of the European Communities.

Badelt, C. (1997). Family policies in Austria in 1995. In J. Ditch, H. Barnes, & J. Bradshaw (Eds.), Developments in national family policies in 1995. Brussels: Commission of the European Communities.

Badelt, Christoph, "Family Policies in Austria in 1995" and "Family Policies in Austria in 1996," in European Observatory on Family Policies, Developments in National Family Policies, 1995; and Developments in National Family Policies, 1996.

Bertelsmann Foundation (2001). International Reform Monitor-Social Policy, Labor Market Policy, and Industrial Relations, Issue 5. October, 2001.

Bertelsmann Foundation (2005). International Reform Monitor-Austria. Retrieved from World Wide Web in October 2005 at: http://www.reformmonitor.org/index.php3?mode=status.

Bertelsmann Foundation (2005). International Reform Monitor-Austria, No. 10. February, 2005.

Council of European Ministers Responsible for Family Affairs (1998). Towards a child friendly society. Strasbourg: Author.

European Commission. (2004). Living conditions in Europe. Brussels: Author. Available online at http://europa.eu.int/comm/eurostat/Public/datashop/print-product/EN?catalogue=Eurostat&product=KS-53-03-831-__-N-EN&mode=download.

European Commission. (1998). Care in Europe. Brussels: Author.

European Observatory on the Social Situation, Demography and Family, 2002.

MISSOC, 2002, at http://europa.eu.int/comm/employment_social/soc-prot/missoc98/english/f_main.htm.

Moss, P. (1996). A Review of services for young children in the European Union-1990-1995. Brussels: European Commission Network on Childcare.

OECD. (2003). Facts and figures. Paris: Author.

OECD. (2000a). From initial education to working life-Making transitions work. Paris: Author.

OECD. (2000b). Thematic review of the transition from initial education to working life: Austria background report. Paris: Author.

OECD Social Expenditure Statistics.

Prinz, C. (1998). Fertility and family surveys in the countries of the ECE Region. Standard country report: Austria. Serie Economic Studies, 10h. New York & Geneva: United Nations.

Richter, R., & Pfeiffer, C. (2001). Living Arrangements and Social Quality: A Synthesis Report.

Schattovits, H. (1999). "Austria," Family Observer.

Schattovits, H. (2003). The situation of families in Austria 1994-2001. Prepared for the European Observatory on Family Matters. helmuth.schattovits@chelllo.at

Talos, E. & Badelt, C. (1999). The welfare state between new stimuli and new pressures: Austrian social policy and the EU. Journal of European Social Policy, 9(4), 351-362.

Contacts

Washington Embassy:

  • Embassy of Austria
  • 3524 International Ct., NW
  • Washington, DC 20008
  • Phone: (202) 895-6700
  • Fax: (202) 895-6750

Ministry

  • Dr. Sigrid Pilz
  • Head of Division Ministry for the Environment
  • Youth and Family Affairs
  • Franz Josefs-Kai 51
  • A-1010 WIEN
  • Phone: 43 (1) 534 75 276
  • Fax: 43 (1) 513 16 79 1263
  • Email: Sigrid.Pilz@bmu.gv.at

Austrian Family Study Center

 

 
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