The origins of the contemporary Austrian social security system date back to the end of the nineteenth century, when rudimentary forms of social security were introduced for specific occupational groups. Workers, employees, civil servants, farmers, and the self-employed each paid into a different social security plan. Workers and employees in Vienna, for example, paid into a different social security fund than did civil servants in Vienna or farmers in Tirol. The main thrust in the development of the country's social security system in the twentieth century has been the creation of a unified social insurance policy for all occupational groups.
The organization of the social security system is complex. The General Social Insurance Act of 1955, which has been repeatedly amended, sets social security policy and makes decisions on deciding such matters as the level of social security payments and the kind and extent of benefits. However, tax revenues are collected and benefits are dispersed by individual insurance agencies or "carriers" for specific occupational groups. In this respect, the social security system is a national plan in terms of federal legislation but is not centrally funded or administered.
The extent of social security coverage and the number of benefits increased in Austria steadily from the end of World War II until the early 1980s. As a result, Austria was among the most highly developed welfare states in the world and had a complicated system of direct taxes on employers and employees and indirect taxes that financed a broad spectrum of benefits.
After the early 1980s, social policy entered a phase of consolidation characterized by difficulties related to funding extensive social security programs, growing levels of unemployment, stagnating economic growth, increasing budget deficits, and demographics of an aging population. However, as of 1993, Austria had managed to maintain its high level of social security without major reductions in benefits.
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