Funding

Funding of early childhood education and care

Objectives

On the one hand, public funding of elementary education aims at early childhood education and upbringing. The funds provided are intended to provide children, regardless of their socio-economic background, with the opportunity for elementary education and to strengthen the educational character of these educational institutions. These educational goals include increasing equal opportunities, early language support and preparation for primary school. On the other hand, the aim of providing public funds for elementary education is to improve the compatibility of family and working life. This objective is sometimes to be achieved by providing and expanding year-round, all-day childcare in line with needs until the children reach school age. In order to ensure access to elementary education for as broad a section of the population as possible, compulsory, free-of-charge half-day attendance at kindergarten was introduced at the beginning of the 2009/10 kindergarten year in the last year before children start school (so-called free kindergarten year).

Role of bodies

Legislation and enforcement in the field of elementary education (crèches, childcare facilities for infants and toddlers, kindergartens, after-school day care facilities and mixed-age care facilities) are the responsibility of the nine provinces. The number, opening hours and private costs may therefore vary from province to province. The providers of these institutions are mainly municipalities and private associations. Of the total of 9,297 day care facilities for children in the 2017/18 school year, 55.4% are run by a public provider and 44.6% by a private provider. The federal government plays a subordinate role with regard to the state funding of the elementary sector. In 2016, the federal government spent around EUR 6.7 million on early childhood education, which corresponds to 0.3% of state spending on education in the elementary sector. Most of the expenditure is distributed between the provinces (including Vienna) and the municipalities. The provinces bear about 48% of the expenditure with around EUR 1,031 million, while the municipalities account for EUR 1,105 million (52%) of the public education expenditure in the elementary sector.

Total gross transfers at the state level in 2017 amount to EUR 1,378.17 million. The majority of this comes from the budgets of the provinces including Vienna (EUR 1,154.7 million). The beneficiaries of transfer payments from the provinces are mainly private non-profit organisations (EUR 615.9 million) and municipalities (EUR 516 million). The gross transfers of the provinces amount to a total of EUR 158.7 million, of which the majority (EUR 105.2 million) is received by private non-profit organisations. The federal government’s gross transfers of EUR 64.7 million are given entirely to the provinces.

Funding mechanisms

Public funding in early childhood education and upbringing is predominantly input-based. Personnel and space requirements are determined on the basis of the number of children to be cared for. In addition, the group sizes and qualifications of the staff are taken into account. The exact regulations vary depending on the care institution and the province. In addition, the federal government and the provinces have decided on earmarked funding. The aim is to fund, for instance, the expansion of childcare facilities, early language support and non-contributory attendance at appropriate elementary educational institutions. The distribution key of the special-purpose grants of the federal government and the extent of co-financing by the provinces are laid down in the Financial Equalisation Act (Finanzausgleichsgesetz). A prerequisite for issuing special-purpose grants is the existence of an agreement pursuant to Art. 15a of the Federal Constitutional Law between the federal government and the provinces on the specific use of the special-purpose grants and on their accounting. If this agreement does not enter into force for one or more provinces in a calendar year, for the other provinces their share of the federal government’s special-purpose grant shall be increased in proportion to their shares in the distribution key.

Funding of primary and secondary education

Objectives

The Federal Constitution defines democracy, humanity, solidarity, peace and justice as well as openness and tolerance towards people as the basic values of schools. On this basis, schools shall guarantee access to educational opportunities for the entire population, regardless of origin, social situation or financial background. The quality of school education shall be ensured and further developed by the state. The reason given for the hierarchical structure of secondary schools is different talents, missions in life and career goals.

The School Organisation Act (Schulorganisationsgesetz) states that Austrian schools have the task of contributing to the development of young people according to “moral, religious and social values” and the values of the “true, good and beautiful”. In addition, they should provide young people with the knowledge and skills they need for their “lives and future careers” and teach them to “acquire education on their own”. Young people should be taught to become “healthy, hard-working, dutiful and responsible members of society” and democracy-conscious citizens. In addition, independent judgement and tolerance of other ways of thinking should be strengthened. Finally, they should also have the capacity “to be interested in the economic and cultural life of Austria, Europe and the world and, with love of freedom and peace, be involved in the joint tasks of humanity”.

In order to take account of the increasing career and social requirements, the nine-year compulsory schooling period was extended to include the so-called training obligation (‘AusBildung bis 18’) with effect from the 2017/18 school year. Its aim is to ensure that all young people under 18 years of age receive training that goes beyond compulsory schooling if possible. The initiative aims to improve the coordination of existing education and training programmes and to create new ones. This is intended to support the choice of training, reduce drop-outs from education and training, improve preparation for further training for disadvantaged young people and promote in-company and supra-company apprenticeship training.

Role of bodies

The provinces are responsible for providing teachers at public general compulsory schools (primary schools, compulsory secondary schools, special needs schools, prevocational schools and part-time vocational schools). As the employer, they have sovereignty in personnel matters regarding the teaching staff. The provinces are also the largest providers of schools of intermediate vocational education and training (=schools of intermediate VET) (including schools of agriculture and forestry) and colleges of higher vocational education and training (=colleges of higher VET) (including the healthcare sector). The majority of the educational expenditure of the provinces (excluding Vienna) is therefore accounted for by personnel costs for schools at ISCED levels 1 and 2. In relation to the gross transfers of the federal government, the transfers of the provinces amounting to EUR 185.37 million are small. The recipients of these transfers are mainly municipalities (EUR 92.6 million), private non-profit organisations (EUR 25.6 million) and other public law bodies (EUR 23 million).

Vienna’s expenditure is determined separately each year by the national statistical authority (Statistics Austria). This is a result of Vienna’s special status as both a province and a municipality. Due to this special position, Vienna has increased expenditure in general and vocational compulsory education. The gross transfers of EUR 14.6 million made by Vienna are mainly received by municipalities (EUR 9.2 million) and private non-profit organisations (EUR 4.9 million).

The expenditure of the municipalities is mainly due to material expenses at primary schools, compulsory secondary schools, special needs schools and prevocational schools. Regional associations of municipalities (Gemeindeverbände) only play a role in some provinces with regard to the funding of education. The majority of the expenditure is accounted for by schools at ISCED level 2. Municipalities and regional associations of municipalities are the largest providers of general compulsory schools. As such, they are responsible for the construction and maintenance of school buildings and other properties as well as for the provision of non-pedagogical staff (e.g. school caretakers, cleaning and supervisory staff, etc.). The gross transfers of the municipalities and associations of municipalities in the school sector amounted to EUR 263.4 million in 2017. Of this amount, EUR 120.4 million went to municipalities and EUR 86.2 million to companies.

According to Article 14 of the Federal Constitution (Bundes-Verfassungsgesetz), the federal government is the provider of secondary schools and colleges (lower and upper secondary level). In the compulsory school sector, the federal government makes substantial transfer payments to the provinces, which are regulated in the Financial Equalisation Act. This states that the federal government will reimburse the provinces for the personnel expenses of teachers under their service prerogative. This includes the costs of provincial contract teachers at public general compulsory schools, which are 100% financed by the federal government, as well as the costs of teachers at part-time vocational schools, which are financed at 50%. In addition, the federal government finances most of the personnel costs in private academic secondary schools, private schools of intermediate VET and private colleges of higher VET. This mainly concerns those private schools that are provided by church organisations. In particular, the Roman Catholic Church is a key provider of schools in the state-financed private school sector. For example, it runs the majority of the colleges for social pedagogues (12 out of 18) and a third of the ECEC teacher training colleges (11 out of 33). In total, the gross transfers of the federal government in the school sector amounted to EUR 4,201.3 million in 2017. Almost all of these transfers (EUR 4,199.8 million) went to the provinces.

Funding mechanisms

The funding of schools is mainly input-based. It is determined by the class sizes regulated by law, demographics and school selection behaviour in academic secondary schools, schools of intermediate VET and colleges of higher VET. The number of required classes and teachers is derived from these framework conditions. A small part of the funding is used for the further development of the school system. For example, funds are made available to finance additional teaching staff. This aims to reduce class sizes, promote language support classes and expand day care in schools, for instance. 

Dual vocational education and training (apprenticeship) is financed by public and private funds. Compulsory attendance of part-time vocational schools amounting to about 20% of the apprenticeship period is predominantly publicly financed, while the company-based part of the training as well as the apprenticeship remuneration are financed by the companies. Precise data on the share of funding of private companies is not available. However, there are considerable public subsidies and tax incentives for the training companies. The aim of subsidies for in-company training is to increase the number and quality of in-company training places. In addition, public subsidies and labour market policy measures are used to integrate unemployed young people or young people seeking apprenticeships into apprenticeship training. Public Employment Service Austria is obliged by law to provide a training place for all young people who are seeking apprenticeship training and cannot find an apprenticeship in a company. In order to be able to offer all apprenticeship seekers an apprenticeship place, supra-company training places are created which are financed entirely from the public funds of labour market support and are handled by private operators on a project basis.

Financial autonomy and control

Financial autonomy

The financial autonomy of public educational establishments in Austria is very low. In principle, the staff employed in elementary education establishments and schools are not employed by the establishments themselves. The entire planning, administration and funding of staff is therefore not the responsibility of the educational establishments. Likewise, the premises and the infrastructure are not financed by the educational establishments but rather by the school provider.

The Education Reform Act (Bildungsreformgesetz) passed in 2017 attempts to increase the autonomy of schools and school associations. As a result of the reform, schools can be run in an organisational network with other schools (so-called school clusters). The management of the school cluster shall define in an organisational plan how the allocated human resources (administrative posts and weekly teacher hours) are to be used. The regulations also relate to non-financial aspects of school autonomy. These include, for example, the autonomous determination of classes and group sizes as well as the autonomous determination of school time.

Academic secondary schools, schools of intermediate VET and colleges of higher VET and, to a lesser extent, compulsory schools have certain opportunities to raise funds. Revenue can be generated from the rental of school buildings or school properties to third parties, advertising and sponsoring, or by holding extracurricular events. The funds gained in this way are to be used independently by the schools for school purposes.

Control

The provinces are responsible for complying with legal regulations and for controlling the resources used (personnel, educational material, etc.) in kindergartens. The framework conditions for control are regulated in the respective kindergarten laws and regulations of the provinces. The authorities entrusted with these tasks must check that the kindergartens meet the prescribed requirements. In many provinces, the provincial government acts as the supervisory authority.

As part of the Education Reform Act 2017, an administrative reform was implemented and a joint authority of the federal government and the provinces was created. Since 2019, the so-called ‘boards of education’ have replaced the regional education boards. This is legally enshrined in the Boards of Education Establishment Act (Bildungsdirektionen-Einrichtungsgesetz). The school administration is carried out by the federal government and the provinces together with this newly formed authority. However, the responsibilities remain divided between the federal government and the provinces. Depending on the type of school, the budgets and personnel issues are either the responsibility of the federal government or the provinces.

Every three years, a school quality report must be submitted to the National Council. The school quality report is based on the education controlling reports of the boards of education and is part of the National Report on Education prepared by the Federal Institute for Quality Assurance in the Austrian School System (IQS). The responsible minister determines the framework conditions for education controlling by ordinance. This includes the definition of school quality and corresponding benchmarks and the creation of regular planning and reporting systems. A Quality Development and Quality Assurance Office has been set up in the Ministry of Education for implementation.

All levels of school administration as well as schools (including school clusters and all-day school forms) are obliged to participate in education controlling (quality management, education monitoring and resource controlling). In principle, education controlling must be geared to the impact objectives and measures as stipulated in the respective Federal Finance Bill (Bundesfinanzgesetz), ensure that the task of Austrian schools is fulfilled in a high-quality manner and ensure that funds are used in an effective, efficient and transparent manner.

In addition, according to the Education Documentation Act (Bildungsdokumentationsgesetz), the responsible federal minister must keep evidence of the personnel, operating and maintenance expenses of those educational establishments where these expenses are financed wholly or partly from federal funds.

Fees within public education

Early childhood education and care

Since the kindergarten year 2009/2010, half-day attendance at kindergartens in the last year before starting school has been free of charge throughout Austria (‘free kindergarten year’). Since the design of elementary education is the responsibility of the provinces, fees may be charged for services that go beyond this. However, some provinces have decided to make the entire elementary education sector free of charge. In Vienna, for example, no parental contributions are required in public institutions for all-day kindergarten or crèche attendance by 0 to 6-year-olds. However, only about half of the children in Vienna are looked after in public institutions. This means that, in elementary education establishments, parental fees for kindergarten attendance may vary depending on the province and the location, although the amount is in part socially adjusted. The contribution for all-day attendance of public establishments therefore covers a broad spectrum. The amounts can be between EUR 40 and EUR 440 per month with adjustment depending on income. Most publicly funded kindergartens collect a contribution from the parents. In addition, additional costs may be incurred for the provision of meals, handicraft materials or excursions.

Primary and secondary education

Attending public schools is, in principle, free of charge. Contributions and co-payments are required for certain items and services such as school books, teaching materials and public transport between the school and home. School events such as project weeks or other excursions are to be paid for by the households, as is catering at the schools. A childcare fee must be paid for pupils in all-day public compulsory schools. If pupils are accommodated in a boarding house, a contribution for overnight accommodation must be paid in addition to the childcare fee.

Financial support for learners' families

Cash benefits

Parents and guardians receive an age-related family allowance for each child until the child reaches full legal age. The Family Support Act (Familienlastenausgleichsgesetz - FLAG) regulates family allowances by law. From birth, the amount of the family allowance is EUR 114 per month and rises to EUR 165.10 by the age of 19. For each additional child, the family allowance paid per child is increased (sibling supplement). The family allowance per child increases for each child by between EUR 7 (for two children) and EUR 52 (for seven or more children).

A family allowance is also granted for people who attend a school or university after reaching full legal age up to the age of 24. In addition, from the birth of a child, either a flat-rate childcare allowance or an income-dependent childcare allowance can be received. Depending on the chosen period of entitlement (12 to a maximum of 36 months), the flat-rate childcare allowance varies between EUR 436 and EUR 1,000 per month, while in the income-dependent variant 80% of the last income is paid for a maximum of 14 months.

There are a number of additional financial support measures available from the provinces and municipalities, which can either be applied for by everyone or are awarded depending on income. In some provinces, for example, a school or youth starting allowance is granted irrespective of family income. For low-income households, a variety of allowances and subsidies are available, such as for food (meal fees), participation in school sports weeks, and other family assistance and allowances.

Tax incentives

Since 2019, parents and guardians subject to wage tax have benefited from the ‘Family Bonus Plus’. This tax deduction reduces the tax burden by up to EUR 1,500 per year for each child for whom the family allowance is received. A reduced family bonus of EUR 500 per year can be deducted from tax for children of full legal age.

Since 1 January 2009, childcare costs have been tax deductible and therefore reduce the amount of wage and income tax payable. This relates to expenses for all legally regulated facilities for early childhood education and care as well as afternoon care for school children up to the age of 10 in after-school day care facilities. Since 28 July 2011, food has also been tax deductible.

Contributions in kind

The necessary school books are made available to the pupils as part of the so-called ‘school book initiative’. The legal regulation of the school book initiative can be found in the Family Support Act (FLAG). As a family policy benefit, the aim of the school book initiative is to provide pupils with the necessary school books and to ease the financial burden on parents. All pupils who attend a public school or a private school with public-law status in Austria are entitled to receive free school books within the school book budget.

In addition, pupils and apprentices for whom family allowances are paid can apply to a public transport company for free travel. Free travel for pupils and apprentices is also legally regulated in the FLAG. Free travel applies to the distance between the place of residence and the school or training company. A co-payment of EUR 19.60 per year is required. If no public transport is available, it is possible to apply for a school or home travel allowance. For the journey to and from public kindergartens, many municipalities create their own transport services.

Financial support for families of pupils with special educational needs

In addition to the general family allowance, a supplement of approximately € 156 per month is granted for severely disabled children. A severe disability within the meaning of the FLAG exists if a child suffers from a health impairment that is not only temporary (i.e. it is expected to last for more than three years) and the degree of disability is at least 50% or the child is expected to be permanently unable to support himself/herself. If there is a disability of at least 50%, the increased family allowance is granted for as long as the general family allowance is due. If the child is therefore already of full legal age, the conditions for granting a family allowance for children of full legal age (e.g. need for vocational training, but no proof of performance) must be fulfilled. In such a case, the family allowance may be paid until the age of 25. There is no age limit for children with permanent incapacity to work if the expected permanent incapacity to work occurs before the age of 21, or during vocational training before the age of 25.

Families who themselves care for their disabled children are also entitled to a care allowance. The amount of the care allowance depends on the need for care and is currently between EUR 157 and EUR 1,689 per month. This cash benefit is regulated by law in the Federal Care Allowance Act (Bundespflegegeldgesetz).

Parents can also apply to the health insurance funds for assistance with the costs of therapeutic and medical treatment. It is possible to apply for this subsidy for support measures to increase mobility, for structural adaptations as well as technical and orthopaedic aids for the blind, deaf and physically disabled. Care costs for children with minor disabilities, for whom no increased family allowance or care allowance is received, are tax deductible in the income tax return.

An application can be made to the Federal Social Office for a training allowance of up to EUR 714 per month to cover additional expenses incurred as a result of a disability as part of further training after compulsory schooling. The application must be accompanied by a medical report on the degree of disability (a degree of disability of at least 50% is required for apprenticeship training).

Companies that hire disabled people as apprentices are entitled to a premium, which is paid on a yearly basis retrospectively. In addition, the provinces and municipalities provide various forms of support for children and pupils with disabilities.

Financial support for learners

The Schooling Allowances Act (Schülerbeihilfengesetz) provides for three types of allowance for pupils: school allowance, accommodation and travel allowances and the special school allowance.

• Pupils from the 10th grade onwards who attend an intermediate school or college and who are in need of social support and can also prove school success are entitled to the school allowance. The school allowance amounts to EUR 1,130 per year.
• Accommodation and travel allowances can be paid to pupils from the 9th grade onwards if they cannot live with their parents because the school location is too far away from their place of residence. The need for social support and school success must also be proven. The need for social support is determined by the level of disposable income, family status and family size. The accommodation allowance is EUR 1,380 per year and the travel allowance EUR 105 per year.
• The special school allowance is an allowance for working students who are about to graduate from an upper secondary school for people in employment (e.g. evening school) and are therefore interrupting their gainful employment. The exact amount of the special school allowance is calculated from a basic amount of EUR 715 per month. Prerequisites are attendance of an upper secondary school for people in employment and probable success in the final examination in the school year of the application. In addition, at least one year of professional activity must have been completed before attending school and an unpaid leave of absence must have been taken or the professional activity must have been stopped for the purpose of preparing for the final examination.

Pupils from academic secondary schools, schools of intermediate VET and colleges of higher VET who are in need of social support can receive financial support for participation in school events lasting more than 4 days in total. In addition, they can apply for a reduction in the childcare fee and contribution for overnight accommodation at all-day school forms and in boarding houses.

Students who are in employment can deduct the expenses associated with school education from their taxable income, which leads to a reduction in wage tax. The possibility of educational leave can also be used by students who have been employed for at least 6 months without interruption beforehand. The educational leave is subsidised for up to 12 months with a monthly further training allowance equal to the unemployment benefit and this is paid by Public Employment Service Austria.

All students are covered by accident insurance for the duration of their stay at the schools. There are various additional subsidies for apprentices in the individual provinces and municipalities, such as for travel, housing and catering costs.

Private education

The providers of private educational establishments are responsible for financing personnel and infrastructure, with the majority of establishments in the private education sector being publicly subsidised. Only privately financed educational establishments have full financial autonomy. From a pedagogical and organisational perspective, they are subject to official supervision. Control of the financial resources and their use is incumbent on the provider of the schools or day care facilities for children.

The funding of private day care facilities for children is a matter for the provinces and is therefore regulated differently in the individual provinces. In principle, the provinces support privatekindergartens for which there is demand by reimbursing the personnel costs for the pedagogical staff and by contributing to the personnel costs of the care staff. Supervision in publicly subsidised private kindergartens is the task of the responsible provincial government and the kindergarten inspectorate appointed by it, which also includes the control and monitoring of the publicly funded staff.

In the school sector, public financing of private schools with public-law status consists of subsidies for personnel expenses. The majority of private schools are run by recognised churches and religious communities (private religious schools). For them, the state bears the costs of all the teaching staff required to fulfil the curriculum of the school concerned. In most cases, the teaching staff are provided entirely by the federal government or the provinces. As in the case of public schools, the employers of these teachers are therefore the local public authorities. This means that they have the same supervisory duties over these staff as in public schools (cf. chapter 2). Staff costs in non-religious private schools with public-law status are also subsidised under some circumstances, with similar control measures then applying to state-financed staff.

Apart from state funding and statutory school obligations, private schools act completely autonomously in financial terms and are accountable solely to the school provider.

As a rule, fees are charged for attending private educational establishments, the amount of which is determined by the provider. Depending on the form and type of school (all-day school, afternoon care), school fees range from EUR 50 to EUR 500 per month (up to EUR 800 per month for boarding schools).

In addition, some schools charge a one-time registration fee. Various school providers grant income-dependent reductions in school fees. In addition, as with public institutions, contributions have to be paid for school events, meals, etc.

Pupils and their families essentially have the same entitlement to financial state support as the benefits for children and pupils in public schools (for learners families and learners) described in up in this chapter.