Debt counselor:

“Supporting those who don’t urgently need it”

Umbrella organization of state-approved debt counselling services in Austria, Clemens Mitterlehner

(Bild: krone.tv)

Debt counseling services experienced a real rush last year. Increased living costs and housing costs as well as unemployment and loss of income led to almost 22,000 people contacting a debt counseling service for the first time in 2023. Compared to 2022, there has been an increase of almost 17%, explains Clemens Mitterlehner, Managing Director of the umbrella organization of state-approved debt advice services in Austria.

The main reasons for debt are still a reduction in income and unemployment. "However, when comparing 2022 to 2023, we see that more and more people are struggling with inflation. One in eight people who come to debt counseling now say that this is the main reason why they can no longer afford it," said Mitterlehner in the talk with Jürgen Winterleitner. It is also worth noting that women are even more affected: "Here it is over 14 percent who say that inflation is the main reason for over-indebtedness."

As far as social policy relief is concerned, there are many measures with many details, says Mitterlehner, who highlights a few examples in the interview. The family bonus plus, for example, is designed in such a way that the full family bonus only benefits people who have a relatively good income. "If it really is supposed to be a measure to promote families, then it's exactly the wrong way round. It supports those who don't need it as much as others."

Umbrella organization of state-approved debt advice services in Austria, Clemens Mitterlehner

(Bild: krone.tv)

A second major issue is unemployment, which has always been a major topic in debt counseling: "We see that with the net replacement rate of 55 percent, many people suffer a financial shock when they become unemployed. So, if I asked you now, you would have 55 percent of your income in one fell swoop, you would also start to ponder how it would all work out." One possible solution: "Together with other institutions, we have long been calling for this net replacement rate to be increased to 70 percent in order to prevent this financial shock from becoming too great."

The long-term unemployed "won't find a job either way"
Mitterlehner is skeptical about the tax incentives presented by Chancellor Karl Nehammer (ÖVP) in the Austrian plan, such as a full-time bonus and incentives for full-time work. "These measures can work for a certain population group, namely people who do not have very bad chances on the labor market. However, the big problem on the labor market is the long-term unemployed.

(Bild: P. Huber)

"No matter how many 'motivating factors' are included, they won't find a job one way or another, for example because they have health problems, because they have a poor education, because they have poor language skills on the labor market." According to Mittlerlehner, you can learn from these people how to be economical with money. "So it's not as if they should be pigeonholed and told that it's all their own fault."