The purpose is to increase the employability of unemployed persons who are disadvantaged in the labour market (e. g. older workers, long-term unemployed etc.), as well as to prevent their social exclusion.

This goal matches the policy priorities set by the Europe 2020 strategy, particularly the EU’s aim to foster inclusive growth.

The wage subsidy “integration subsidy” aims at the integration of specific target groups, e.g. long-term unemployed or persons at risk of becoming unemployed into the labour market and shall give employers an incentive to hire persons of these specific target group and thereby help to integrate those persons into the labour market. It is a wage subsidy paid to employers and thus also aims at creating additional jobs and thereby reducing the employment deficit.

It targets specifically long-term unemployed, chronically long-term unemployed, groups which are further from the labour market, older workers, older unemployed (women aged 45 plus and men aged 50plus) with health issues (refers to the implementation of ‘come back plus’), young adults, people with psychological, physical or mental disabilities, returners, socially maladjusted individuals (alcohol, drugs, imprisonment, etc.), as well as job-seekers with poor or outdated labour market skills who have been registered with the PES for a longer period of time.

Integration subsidies are used by the public employment service to support placement activities and the (re)integration of disadvantaged groups. The support takes the form of wage subsidies to their employers (periodic payments).

Up to 66.7% of the assessment basis (monthly gross pay excluding special bonus payments, plus a lump sum of 50% for non-wage labour costs) is subsidised. During a probationary period of no more than three months (six months for people with disabilities) these subsidies may cover 100%.

An integration subsidy may be granted for the duration of the employment relationship, but for no more than two years.  A year extension can be granted for those who are registered as disabled.

The subsidy is conditional on the establishment of a fully insurance-covered employment relationship which comprises at least 50% of the statutory or collectively agreed weekly hours, is adequately paid (minimum: standard pay under collective agreement; where no collective agreement can be applied, the pay level is determined – in case of doubt – on the basis of comparable collective agreements or pay schemes), and complies with the stipulations of labour and social law.

As of 2013 the integration subsidy is used by the PES to implement the ‘come back plus’ programme which is targeted at older job-seeker with health issues. In this case the subsidy can be granted for a year. It amounts to 50% of the assessment basis (current gross pay plus 50% for non-wage labour costs) for-profit employers and up to 66.7% for not-for-profit employers.

The evaluation identifies positive effects on the employment of recipients, and in particular for those from older age categories (45-54), in terms of funding period, unemployment time and income. However, deadweight loss is also significant.

Monitoring 2013:

• In 2013, the stock of registered unemployed in Austria was 287,207 persons and the inflow into unemployment of 1,179,231 persons, the number of active employed about 3.4m
• In 2013 the average stock of recipients was 9.842 persons with an average duration of 90 days. There were 43.724 entrants in employment subsidies: 50.5% were female; 42% were older than 45 years, 40% 25-45-year-olds and 18% below the age of 25.
• 57% had ISCED 0-2 as highest qualification, around 33% ISCED 3B (apprenticeship, medium vocational education), 7% ISCED 3A or 4B (general or vocational education with university entrance exam), and 3% a tertiary education.
• € 92m were spent on the integration subsidy, which corresponds to 4% of spending on active and activating labour market policy or 0.03% of GDP. Average spending per person amounted to € 2,113.