Austrian legislation, which modulates - upwards or downwards depending on the standard of living - the flat-rate amount of family allowances and that of various tax benefits granted to workers whose children reside in another Member State, is in breach of the regulation on the coordination of social security systems (883/2004), the Court of Justice of the European Union ruled on Thursday 16 June (Case C-328/20).
Based on the opinion of the Advocate General (see EUROPE 12873/29), the Court is of the opinion that the contested mechanism, in that it is only applied in the case of the child’s residence outside Austrian territory, mainly affects migrant workers established in Austria. As the latter mainly come from countries where the cost of living is lower than in Austria, they receive lower social benefits and tax advantages than Austrian workers.
According to the Court, this difference in treatment is not justified. It points to the fact that differences in price levels within the provider Member State are not taken into account. And it adds that a migrant worker contributes in the same way as a national worker to the financing of social benefits and tax advantages.
Consequently, as the Regulation on the coordination of social security systems requires strict equivalence between the amounts of family benefits provided by a Member State to workers, irrespective of the place of residence of their family, the Austrian mechanism constitutes an indirect discrimination based on nationality which is not justified and an infringement of the freedom of movement of persons within the EU.
See the judgment: https://aeur.eu/f/25u (Original version in French by Mathieu Bion)