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European Commission opens infringement procedure against Austria about family benefits

As from 1 January 2019 a new law on family benefits came into effect in Austria. Under this new rule EU citizens working in Austria with children residing in another EU country face an indexation of family benefits and family tax reduction.

The majority of workers in Austria come from Eastern European neighbours, such as Poland, Slovakia or Hungary. The cost of living in those countries is much lower, which would mean that the workers would receive less family benefits compared to their local workers.

The European Commission sees this legislation as discriminatory and has opened an infringement procedure against Austria, sending a letter of formal notice last week. Austria has now 2 months to respond to the letter. However, the Austrian government, which is in a coalition between the conservative People’s Party and the right-wing Freedom Party, have already stated that they do not share the same concerns as the Commission’s opinion and would try to hold on to the new rule.

Commissioner Marianne Thyssen states that “there are no second-class workers in the EU and no second-class children either” and that we need to uphold fairness and equality between EU citizens. However, the introduction of the indexation is the opposite since many EU citizens who contribute to the social security and tax system in the same way as local workers, now receive fewer benefits.

Background:

In Austria family benefits (Familienbeihilfe) can be claimed usually until children turn 24. The family benefits range from €114,00 to €165,10 for one child with staggered increase for additional children. The family tax reduction (Kinderabsetzungsbetrag) comes into force for every person who is liable to tax and amounts to €58,40 monthly.

The new legislation affects around 132,000 children in many different countries. The family benefits are being calculated based on Eurostat. The amounts after indexation can be found on this government website.  

For more information:

Press release (European Commission): http://europa.eu/rapid/press-release_IP-19-463_en.htm

Speech by Marianne Thyssen on the launch of the infringement procedure: http://europa.eu/rapid/press-release_SPEECH-19-664_en.htm

Details about the infringement procedure: https://ec.europa.eu/info/law/law-making-process/applying-eu-law/infringement-procedure_en

Details about family benefits in Austria (DE): https://www.help.gv.at/Portal.Node/hlpd/public/content/8/Seite.080714.html