Payments abroad: EU Commission takes action against Austria's new child benefit rules

According to the European Commission, the new Austrian child benefit rules for EU citizens violate European law. The Brussels authority has therefore initiated a so-called infringement procedure against Austria, which adapts child benefit payments to the cost of living in the country of residence of the child.

Such a procedure by the EU takes place in different steps. Accordingly, Austria must now first respond with a detailed response. As a rule, an EU country has two months to do this.

The so-called indexation of family allowances was approved last October by the Austrian Parliament. Even then, the EU had announced an examination of the case. Under the new scheme, foreign families whose children live in their homeland will only receive child allowance, which will be adjusted to the usual cost of living in their respective countries. This results in significant cuts for example for Hungarians and Slovaks.

In Germany, such an approach had also been discussed several times. Here, the EU rejected the proposed new regulation last summer. The German authorities paid child benefit amounting to around 402 million euros abroad last year. Among the almost 252,000 children who received child allowance to European countries or Turkey, Polish children (123,855) were the largest group.

Payments abroad are increasing significantly

Remittances have risen sharply over the past five years. According to the Federal Government, child benefit amounting to around 75 million euros went abroad in 2012.

In June, the CSU presented in the Bundesrat an application to adjust the amount of child benefit to the cost of living in the country where the child lives. However, the Finance Committee decided to postpone its deliberations on the initiative indefinitely. One reason is the concern of the European Commission.

The Brussels authority argues with the logic that equal contributions should also lead to the same benefits. This refers to the fact that child benefits and other family benefits in countries such as Austria and Germany are only paid to those EU foreigners who also contribute to the respective social security system.