After the collapse, Arz moved to in Vienna. He was granted a civil list pension of 20 000 Krone, but because of the growing inflation and anyway being not wealthy he had soon a very bad financial situation. Moreover, he became a scapegoat by the public opinion since next to the resigned King the Chief of the General Staff was made responsible for the consequences of the armistice and the defeat of the Battle of Piave. The newly established First Austrian Republic in spite of a new law accepted on 19 December 1918 conducted an infringement procedure against him regarding the Battle of Piave, however it ended without any result.