The indexation of family benefits in Austria is illegal according to a ruling by the European Court of Justice (ECJ). Adjusting the amount of family benefits, child credits and other family tax benefits for EU citizens who work in Austria but whose children live abroad violates EU law, the Luxembourg judges concluded in a judgment published on Thursday.
Austria is now threatened with extra payments. One was “prepared for all the possible legal ramifications of the court’s ruling,” the Ministry of Family Affairs said recently. According to a parliamentary inquiry in May, department head Susanne Raab (ÖVP) has already made a provision of 220 million euros for possible additional payments.
violation of Union law
Indexing child benefits was a prestige project of the first turquoise-blue government. Family benefits and child tax credits for EU citizens working in Austria are adjusted to the cost of living in the country where the children live. While benefit recipients get more through indexation for children in Ireland, children in Romania don’t even get half of what is paid for a child in Austria.
The EU commission considered that this violated EU rules on the free movement of workers and was discriminatory. The Brussels authority lodged a complaint with the Court of Justice in May 2020.
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