EU foreigners are fully entitled to child benefit and other family benefits, even if their relatives live in another EU country with a lower cost of living.
The EU member states should not make the amount of benefits dependent on where the children of migrant workers live, which violates EU law, the European Court of Justice ruled in Luxembourg (ECJ).
Migrant workers participate in the financing of the benefits granted in the same way as domestic workers, regardless of where the children live.
Katja Gelinsky
Business correspondent in Berlin
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The judges decided on an Austrian regulation from 2019, with which Chancellor Sebastian Kurz (ÖVP) and his government wanted to score points with the FPÖ.
The family allowance and various tax breaks have been adjusted to the cost of living in the EU country in which the children live.
Families from Eastern Europe in particular suffered losses, some of which were severe.
Among the winners were workers whose children live in France, the Netherlands or Scandinavian countries.
The Austrian government is now facing high repayments.
220 million euros have already been budgeted for this.
In Germany, too, efforts were made to link social benefits for EU foreigners to the cost of living in the country where the children live.
In the spring of 2017, the black-red federal government presented key points.
These were aimed at adapting EU law.
But the European Commission played down the issue, pointing to the ban on discrimination and high bureaucratic hurdles.
In 2020, the Commission brought an action against Austria.
It was supported by Eastern European EU member states.
Austria received support from Denmark and Norway, but not from Germany.
On Thursday it was initially unclear whether the Scholz government would continue to insist on a change in EU law in order to be able to reduce child benefits for EU foreigners if necessary.
(C-328/20)