The European Court of Justice decided that the suit of the EU-Commission about the Austrian indexation of child benefits is applicable in full range. The mechanism adjusts the amount of child benefits and different tax benefits for migrant workers depending on the country where their children are living.
The EU-Commission filed a lawsuit against Austria in May 2020 in the frame of the process of contract uncompliance. As per the opinion of the EU-Commission this is a mechanism that allows Austria to pay less in child benefits to certain migrant groups coming from poorer nations. This is discriminatory since the migrant workers are paying taxes to the state in full amount.
In its judgement the panel concludes that such a mechanism is indirect discrimination on the basis of the country residency, which is against the regulation about the permissiveness of workers in the Union and also against the laws, which coordinate the systems of social security.
In its verdict the EU Court of Justice therefore confirmed in full range the suit of the EU-Commission and followed the final application of the Public Prosecutor of the Court. Austria will now have to adjust the mechanism and the aggrieved will be beneficiaries for refunds in the amount of the illegal deductions.
