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Brussels suing Austria for child benefit regulation

The EU Commission has brought Austria to the European Court of Justice over the child benefit scheme for EU citizens that has been in effect since 2019. The laws are discriminatory and therefore violate EU law, the highest EU authority claimed on Thursday.

Published: May 16, 2020, 9:33 am


    The previous Austrian administration comprising of the ÖVP and FPÖ parties decided in 2018 to adjust child benefit payments to the living expenses of the state in which the child lives. As a result, for example Romanians working in Austria received fewer benefits if their children lived in their home country. According to calculations, the Austrian government saved around 100 million euros by doing so.

    However, according to Brussels, these rules contradict EU law. Therefore, the EU Commission initiated an infringement procedure against Austria in early 2019. The rule violates “the existing rules on the coordination of social security and is discriminatory, since some mobile EU workers who fully contribute to Austria’s economy, employment and social security receive lower benefits than those whose children are in Austria live”.

    This is because indexing with lower payments does not apply, for example, to Austrians who work abroad for an Austrian authority and whose children live with them there, even though their situation is comparable to workers from the countries mentioned.

    Austria’s Minister of Family Affairs Christine Aschbacher (ÖVP) defended the regulation. “Because of the different cost of living in the EU, it remains a question of justice for us,” said the ÖVP politician on Thursday. The EU Commission could of course ask the Court of Justice “if it has doubts about the compatibility of indexing under European law”.

    The opposition SPÖ praised the decision of the commission. They send an “important signal for more justice,” said the two SPÖ-EU MPs Andreas Schieder and Evelyn Regner. “In a just Europe, all children are of equal value. Chancellor Kurz will also have to recognize this.”

    In Germany, too, the debate about the payment of child benefit abroad has been raging. According to the family fund, around 402 million euros in child benefit payments went abroad in 2018 to the 252 000 recipients. Parents of children living outside of Germany can choose whether the money is transferred abroad or paid into an account in Germany.

    The transfers had increased significantly in the past five years. According to the German federal government, around 75 million euros in child benefit payments went abroad in 2012.

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