In June (16.6) this year, the Court of Justice of the European Union ruled in favour of nannies and their children.
Family allowances were allocated unfairly
The dispute arose because of benefit cuts by Austria, which introduced lower family allowances in January 2019 when Chancellor Sebastian Kurz was at the helm of government. Under this system, the Ministry of Family Affairs, in charge of disbursements, provided migrant workers with family allowances in an amount equivalent to the cost of living in the countries of origin and residence.
The level of contributions thus depended on the standard of living of the individual countries of the European Union and varied up or down from country to country. This shows that employees from poorer countries received less money for children than those from richer Member States. The majority of foreign workers come from countries with a lower standard of living than in Austria.
Employees from several countries are affected
This injustice has thus affected nannies and their families from several countries who go to Austria to work. Because of the criticised law, many of them quit their jobs there. The unfair mechanism included allowances and benefits including the Dependent Child Tax Bonus, the Family Plus Bonus, the Single Income Household Tax Bonus, the Single Parent Tax Bonus and the Maintenance Tax Bonus.
Discrimination
The Luxembourg-based court has agreed that the child benefit is not in line with EU law and is therefore unlawful. According to the court’s ruling, this was indirect discrimination based on the nationality of the migrant workers and Austria violated one of the EU’s fundamental pillars – the right to free movement of labour within the EU.
The action to adjust the amount of family allowances was brought by the European Commission in Brussels in 2020. The decision was supported by a number of countries such as the V4 and the Baltic States. But also Croatia, Slovenia, Romania, Belgium, Portugal, Spain and Italy. Denmark and Norway side with Austria.
Equal rights
Employees resident in another Member State also pay taxes to the Austrian Treasury, thus contributing fully to the economic and social system. Therefore, they are entitled to benefits at the same rate as citizens of the state. The Union standard determines the same rights.
Double standard
Another problem with the legislation, which has been in force for more than three years, is that the adjustment of family allowances challenged by the Commission did not apply to Austrians working for Austrian employers abroad, where they also live with their children. This is a case based on the same principle.
Family allowances worth millions
Austria has had to amend the law that has become the target of criticism to avoid discrimination. Otherwise, it would face another lawsuit for non-implementation of the CJEU ruling. In that case, in addition to the debt settlement, the State would also face penalties in the form of late payment penalties and a financial penalty.
The minister in charge of the ministry in charge of the case, Susanne Raab, said she accepts the court’s decision, accepts responsibility for the situation and that the difference in benefits will be made up to the workers concerned. The total amount of the debt is expected to reach up to €220 million.
Family allowances owed and the procedure for payment
Family allowances are paid automatically by the Austrian tax office to the workers concerned on the basis of the data entered in the system. The disbursement process has been ongoing since the beginning of August. Some have already been paid the difference, others still have to wait. The tax authorities contact the employees working in Austria who are affected in the event of insufficient information. The Embassy of the Slovak Republic in Austria informed about it through its Facebook account.
The Embassy also stated that if the data provided in the tax system is outdated or incomplete, e.g. If you have changed banks and have a different account number, you need to apply via the FinanzOnline electronic portal, which allows you to communicate electronically with the Austrian tax office, or via the Beih100 form. Further details are available on this page. Therefore, if you are waiting for your benefits to be topped up, we recommend that you check that the Austrian tax office has all the information you need.
If you want to become a carer, find out how to get there here. You can find out which social benefits are offered by foreign countries and which are offered by Slovakia in the following blog articles.
