Educational leave costs are rising rapidly: radical reform is called for

The costs for further training money including social security contributions shot up from 380 million euros in 2022 to 512 million euros in 2023, according to an evaluation by the economically liberal think tank Agenda Austria. The think tank is now calling for “fundamental reform”. The further training measure is financed by the Employment Service (AMS).

• Read on the topic: What the educational leave has to be used for [OÖNplus]

In an eight-page report, Agenda Austria analyzed the further training measure based on educational leave data from the AMS and the Ministry of Economics. In the second quarter of 2023, there were around 22,000 recipients of further training allowance. “The educational leave was a good idea, but it does not meet the goals set by politicians,” said Agenda Austria economist Carmen Treml. Instead of low-skilled workers, educational leave is preferred by people with good training.

“Sabbatical at the expense of the public”

“Quite a few apparently see this as an opportunity to take a sabbatical at the expense of the general public,” said the economist. “Educational leave is unique in Europe in terms of the length of time and the financial extent.” The largest group of recipients are young mothers who extend their maternity leave with the help of educational leave. According to the Court of Auditors, the number of people who took educational leave immediately after parental leave increased more than tenfold between 2017 and 2021. Further training providers advertise with slogans such as “Extend baby leave for 1 year”. According to economist Treml, there are seasonal fluctuations among male recipients of further training allowances, which would look suspiciously like the ups and downs in the construction industry during the year.

• Also read: Educational leave should be reformed

Agenda Austria identifies an urgent need for reform in educational leave. “If the measure is not abolished and further training is generally reorganized, at least a fundamental revision is necessary,” said the Agenda Austria economist. The economically liberal think tank proposes five changes to further training allowances: The requirements for the type, duration and traceability of further training should be increased. It would also be more effective if companies themselves financially covered part of their employees’ educational leave costs if further training was in the interests of the company. According to Agenda Austria, those workers with less training who want to switch to higher-skilled sectors should benefit from the further training measure. In order to better evaluate educational leave, the think tank believes that a much more detailed application form and significantly more socio-demographic data on the applicants are needed.

The Court of Auditors already pointed out weak points in the training allowance in its audit report published at the end of April 2023. The content requirements for training and further education are “so low that educational leave could be used equally for less complex courses that are of little relevance to labor market policy and for ‘breaks from the work process’ financed with public funds,” the RH auditors wrote in their report .

“Intensive exchange process with the social partners” about reform

Labor and Economics Minister Martin Kocher (ÖVP) hopes to bring about a reform of educational leave with the Greens this year by the end of the legislative period. There is “an intensive exchange process with the social partners” and we have already come “very far,” said Kocher at the beginning of March at the business journalists’ club in Vienna. Kocher announced that the aim was to make “educational leave more accurate” and the documentation requirements “a little clearer”. However, the number of people on educational leave should not be reduced. “It is a very, very good instrument,” said the Labor Minister at the time. A reform of educational leave is not included in the government program.

The possibility of educational leave has been available since January 1998. Employees can take two to twelve months off for training and further education. During the period of parental leave there is a further training allowance that corresponds to the unemployment benefit, generally 55 percent of the previous net income. During the educational leave, part-time employment is also permitted up to a maximum of 518.44 euros per month. However, the employer must agree to the educational leave; there is no legal entitlement. There is also no statutory protection against dismissal during the period of educational leave. Since the required previous employment period was reduced from three years to six months, the number of recipients has risen sharply.