Starting this year, the right-wing government of Austria has indexed family benefits for EU citizens working in Austria. In practice, this means that the level of the allowance has been adapted to the cost of living of the employee’s home country. This new legislation doesn’t take into consideration that the large majority of these benefits are paid through social security contributions by employees and workers themselves, 80% to be precise, no matter whether the person is an Austrian, EU or third-country national.
For workers and employees from eastern European countries, this results in a considerable reduction of family benefits. These workers are also particularly exposed to precarious working conditions in the health care and construction sector in which many of them are working. The governments of the affected countries have expressed their discontent at the EU level, saying that the legislation is incompatible with EU law and discriminatory. Meanwhile, children in Slovakia, Hungary and Romania are those who have to carry the burden of this legislation which is intended to stir up anti-immigration sentiments. Ironically, to follow the rationale of the indexation more money must be paid to employees whose children reside in EU countries with higher costs of living such as Sweden, Denmark or the Netherlands.
Indexation of family benefits is discriminatory
The European Commission has made clear that this represents a violation of equal treatment and has launched an infringement procedure against Austria. Commissioner Marianne Thyssen has made clear that “[t]here are no second-class workers in the EU. When mobile workers contribute in the same way to a social security system as local workers, they should receive the same benefits, also when their children live abroad. There are no second-class children in the EU.”
The Austrian Minister for Family Affairs, Juliane Bogner-Strauß, insists that the indexation is compatible with EU rules, claiming that different circumstances cannot be treated equally. The different costs of living in the EU would justify indexation. The Commission can take legal action against Austria by appealing before the European Court of Justice if the reasoning of the Austrian authorities is not deemed sufficient.
SOLIDAR highlights that everyone who lives and works in Austria or another EU country pays taxes, contributes to the social security system of that country and is therefore entitled to family benefits. That is also the case for Austrians who live in another EU Member State and receive allowances from these countries. The indexation is a striking example of cheap politics on the back of children who happen to live in a lower income country. SOLIDAR calls on Austria to adhere to the principles of equal treatment and to acknowledge the important work of EU mobile workers who contribute so essentially to the functioning of Austrian society and its economy.