A Mistake with Consequences

After a glitch, the AMS must now repay millions

Due to a serious error, the Public Employment Service must now dig deep into its pockets.(Bild: Eva Manhart)

A woman from Upper Austria did the math more carefully than the AMS and won her case in court—which is now costing the government millions. Several hundred thousand AMS recipients are affected.

It started with about 20 euros a month. In the end, it amounts to 135 million. Because a woman from Linz wouldn’t let it go, the Public Employment Service must now reopen thousands of cases. The government is following through with legislation—and the AMS will make repayments for three years.

The case that set everything in motion is a quick story: A woman from Upper Austria earned 1,123.86 euros gross per month as an employee. When she became unemployed in January 2022, the AMS set her unemployment benefits at 21.09 euros per day. The woman did the math—and discovered an error in the system. The AMS had deducted the full flat-rate unemployment insurance contribution of three percent across the board in its calculation. But given her income, she shouldn’t have had to pay any at all. The threshold for that was 1,828.00 euros. And the consequence is serious: an artificially reduced net income—and thus unemployment benefits that are too low. What was meant to help low-wage earners on their pay stubs ended up working against them at the AMS.

135 million over three years
In October 2023, the Federal Administrative Court still ruled in favor of the AMS. The woman from Linz then appealed to the Administrative Court of Appeal. And in its ruling of July 3, 2026, the court made it clear: The socially graduated contributions must be taken into account in the calculation. Unemployment benefits must be based on actual net income. The federal government must also reimburse the woman 1,346.40 euros in legal costs.

What amounts to fair compensation for the woman from Linz adds up to a hefty sum for the AMS: According to information from the “Krone,” approximately 135 million euros must be refunded over three years to a six-figure number of affected individuals.

Law to Ensure Retroactive Payments
The government will now likely have to implement the ruling through legislation. The law will cover benefits for periods prior to January 1, 2027. The AMS is to review the cases itself and process the retroactive payments. To ensure no one slips through the cracks while the review is underway, the statute of limitations will be suspended—retroactively as of September 22, 2026, the day the AMS received the ruling.

Every euro counts, especially for those with low incomes. The AMS must now act quickly to ensure that those affected receive the money they are entitled to.

Andreas Stangl, Präsident der Arbeiterkammer

Bild: APA/TEAM FOTOKERSCHI/WERNER KERSCHBAUMMAYR

Labor Minister Korinna Schumann (SPÖ) refers to a “legal clarification” that must now be “carefully addressed.” The goal is “a legally sound solution for the affected cases and an orderly implementation.” AK President Andreas Stangl puts it more bluntly: “Every euro counts, especially for those with low incomes. The AMS must now implement the decision swiftly and ensure that those affected receive the money they are entitled to.”

A Legacy from the Black-Blue Coalition
The backstory is particularly telling: The calculation method that the AMS adhered to for years stems from a legal provision dating back to the time of the Black-Blue federal government. The bill for this is only coming due now.