The European Commission announced on Thursday 24 January that it had sent a letter of formal notice to Austria due to its new legislation indexing family benefits and tax reductions to the country of residence of children residing outside Austrian territory.
Since 1 January 2019, Austria has indexed family benefits and the tax reduction for dependants granted for children residing in another Member State according to the cost of living in that Member State.
This new provision means that a European citizen working in Austria, although paying social security contributions and taxes at the same level as local workers, could not claim the same benefits as the latter simply because his child lives in another Member State, where the cost of living would be lower.
This Austrian legislation infringes the principle of equal treatment and non-discrimination on the basis of nationality, explained the institution, which upholds the European Treaties.
“There are no second-class workers, nor are there any second-class children”, Employment and Social Affairs Commissioner Marianne Thyssen sternly told the press. According to the Commission, the Austrian legislation also does not comply with secondary European legislation, in particular the Regulation (883/2004) on coordination of social security systems and the Regulation (492/2011) on freedom of movement for workers within the Union.
Vienna now has two months to reply to the Commission, otherwise the institution could send it a reasoned opinion, the next step in the infringement procedure.
The idea of indexing family benefits according to the child's place of residence is not new. It was called for by former British Prime Minister David Cameron before the Brexit referendum (see EUROPE 11493), and was taken up by some Member States (Austria, the Netherlands, Denmark and Ireland) (see EUROPE 12041) and MEPs, particularly German MEPs, in the negotiations on the Regulation on the coordination of social security systems (see EUROPE 11971). (Original version in French by Pascal Hansens)