The SPÖ-led Social Ministry has proposed a significant reform to the social assistance law, targeting high earners. According to APA information, the Finance Ministry suggests lowering the 55 percent top tax rate threshold from 1 million to 500,000 Euro.
The proposal seeks to make the 55 percent tax rate permanent by removing the 2029 expiration date. Regulated via the Income Tax Act, the new 500,000 Euro threshold will not be inflation-adjusted. These changes are scheduled to take effect starting in 2027.
Revenue from this tax increase will fund an increase in the child supplement from 700 to 1,000 Euro. This benefit supports parents whose income tax burden is too low to fully utilize the Family Bonus Plus, which was introduced by the government in 2019.