Advocate General of the European Court of Justice Richard de la Tour considers that the Austrian scheme indexing child benefit and tax credits based on the Member State of residence of the children is contrary to EU law, in his opinion in case C-328/20 between the European Commission and Austria, published on Thursday 20 January.
Since 1 January 2019, Austria has been adjusting the flat-rate child benefit and tax benefits (tax credit for dependent child and family bonus plus, etc.) according to the general price level in the Member State of residence of the children.
Supported by several Eastern Member States (Czech Republic, Croatia, Poland, Romania, Slovenia, Slovakia) and the EFTA Surveillance Authority, the European Commission brought an action against Austria before the Court for failure to fulfil obligations.
The Advocate General proposes that the CJEU uphold the Commission’s action, as the differentiated regime is contrary to EU law. In its regulation on the coordination of social security systems, it is expressly forbidden to modify family allowances or tax credits on the basis of the place of residence of children. For the Advocate General, this is an infringement of the right to move freely within the EU.
Mr de la Tour notes that family allowances and tax benefits remain the same on Austrian territory without taking into account price variations on national territory. He considers that the measure constitutes indirect discrimination on the basis of nationality, as this regulation affects migrant workers more.
Family indexation according to the country of residence of the children is a long-standing bone of contention (in 2013, the United Kingdom, Germany, Austria and the Netherlands were already denouncing “benefit tourism” - see EUROPE 10835/24). The former Commissioner for Jobs and Social Rights, Marianne Thyssen, was clearly already opposed to any form of indexation in 2018 (see EUROPE 11976/14).
To read the full text of the conclusions: https://bit.ly/3GOwAxU (Original version in French by Pascal Hansens)