The Court of Justice of the European Union has recently overturned an Austrian law that granted lower family allowances to children of non-resident foreign workers.
Luxembourg has been the victim of several rulings by the European Court of Justice concerning discriminatory measures against cross-border workers, whether in terms of study grants or family allowances. It is not the only one: Austria has just been rapped on the knuckles. One of the "türkis-blau" (turquoise-blue) coalition's key laws is to blame. This coalition, formed by the far-right FPÖ and the conservatives of the ÖVP led by Sebastian Kurz, ruled Austria between 2017 and 2019. The reform of the FLAG ("Familienlastenausgleich durch Beihilfen", Federal Act on the Compensation of Family Compensation by Allowances) was adopted by the Austrian Parliament on October 24, 2018. It consisted of adjusting the amount of family allowances according to the country of residence of the concerned child.
Each EU country was assigned a cost-of-living correction coefficient based on Eurostat figures: if it was less than one, the child benefit was lower than that received by a child resident in Austria, and if it was more than one, it was higher. For example, a Romanian worker received only 55 euros in benefits for his or her child under the age of two, compared to 114 euros for a child of the same age living in Austria.
Unsurprisingly, Austria's neighbouring countries and the largest providers of workers, led by Hungary, all suffered from a lower coefficient: 0.641 for Slovakia, 0.619 for the Czech Republic, 0.562 for Hungary and up to 0.493 for Romania. Only children living in Switzerland, the Scandinavian countries, the United Kingdom or Ireland were eligible for more generous family allowances.
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