Czech MEPs welcome European Commission lawsuit against Austria over different allowances for non-expatriate children of EU workers

The European Commission (EC) has sued Austria at the European Court of Justice over the so-called indexation of allowances for the children of foreign nationals working there. A spokesperson for the EC announced the news and said the measures are discriminatory and contravene EU law.

Czech workers are among those complaining of disadvantage when Austria disburses different allowances to them for their children who remain in the Czech Republic while their parents work in Austria. Czech MEPs welcomed the lawsuit and have been among those who convinced the EU executive to react vigorously to the measures.

As of 1 January 2019, Austria reduced the allowances for the children of people from other EU countries who work in Austria but whose offspring continue to live in their home country. On the basis of this indexation of the allowance, the cost of living used to calculate the allowance corresponds to the cost of living in the country of origin.

The result is, above all, that workers from less wealthy Member States, including the Czech Republic and Slovakia, receive less money from Austria for their children still living in their home countries, while employees from wealthier EU countries receive more money. The adjustment to how the benefits are calculated violates "applicable regulations about the coordination of social security and is discriminatory, as some employees from EU countries who commute to Austria and who fully contribute to Austria's economy, to gainful activities in Austria, and to its social insurance system are receiving inferior benefits to those whose children live in Austria," the EC said in its decision to bring the lawsuit on 15 May.

The EC further argues the measures are discriminatory because the indexation does not apply to Austrians who work for Austrian employers abroad and whose children live abroad with them. Their position is, however, comparable to that of foreign nationals working in Austria.

Due to suspicions that this indexation is incompatible with EU law, the EC began infringement proceedings against Austria last year. The European Court of Justice has been reviewing the case since the end of April this year, when the Austrian Court of Finance contacted it to ask about compatibility of the measures with EU law.

The Austrian court took its action on the basis of a complaint by Czech commuters who have been harmed by the adjustment of the benefits. The Austrian court wants to hand down its verdict after the EU Court of Justice rules on the case.

The decision of the EC to bring a lawsuit was appreciated by Czech MEPs who have repeatedly contacted the EU executive over the problem. "I am convinced that this is discrimination and the division of persons into two categories. The Austrian law is a clear example of one EU country doing its best to limit the rights of workers from another EU state. That is something we should not allow in a modern Europe," said Czech MEP Martina Dlabajová (elected for ANO) of the liberal faction at the EP, who has long been dedicated to the issue.

She was joined in her communications with the EC by her colleague from the Christian Democrats, Czech MEP Tomáš Zdechovský, according to whom Slovaks and citizens of other Central European nations are bothered by Austria's discrimination. "Austria has been given enough room to correct the situation," pointed out Zdechovský, who is one of four vice-chairs of the EP's Committee on Employment and Social Affairs, under which the subject of child allowances falls.

Vienna is continuing to insist on the controversial indexation, which was enforced by the previous right-wing coalition between the Christian Democrats and the Freedom Party there. Austria's current Family Minister, Christine Aschbacher (Christian Democrats) said the measure is "a question of fairness" for the country.

Last year, according to the daily Die Presse, Austria saved roughly EUR 62 million through the measures, although the previous right-wing Government had promised annual savings of EUR 114 million. Another consequence of the indexation, according to Die Presse, is that many professional caregivers from the eastern part of the EU have stopped working in Austria.