Pflegegeld (Long-Term Care Allowance, Austria)

Concept

The Pflegegeld is an Austrian federal benefit under the Long-Term Care Allowance Act (Bundespflegegeldgesetz, BPGG) that grants people in need of long-term care a flat-rate cash amount towards the additional cost of necessary care and assistance, regardless of income or assets. The amount depends on the level of care need established through a medical assessment procedure and is graded into seven care levels; the allowance itself is not earmarked and may be used freely for professional care services, caring relatives, or 24-hour home care.

Distinction from private long-term care insurance

The state Pflegegeld typically covers only part of the actual cost of care, particularly at higher care levels and for residential care in a nursing home; the difference between the allowance and actual costs must be borne by the person in need of care, their relatives, or, on a subsidiary basis, by social assistance. Private long-term care insurance supplements the Pflegegeld by providing an additional lump-sum or annuity benefit, or cost reimbursement, that can be freely combined regardless of the assigned care level.

Relevance for insurance practice

Given demographic trends and the substantial financial burden of long-term care needs in old age, advising on private products that supplement the Pflegegeld is becoming increasingly important; intermediaries need to understand the care levels and the corresponding allowance amounts to realistically assess a client’s actual need for provision.