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The European Commission said Vienna has violated equal treatment statutes by reducing benefits for some foreign workers. An Austrian law ties some benefits for foreign workers to the cost of living in home countries.
The European Commission announced on Thursday that it is suing the government of Austria over a child benefit law that it says is "discriminatory" towards non-Austrian born EU citizens.
"In our view, Austrian legislation on the indexation of family benefits, child tax credits and other tax advantages for families is discriminatory and not permitted under EU law," the Commission said in a statement announcing that it was taking the matter to the European Court of Justice.
In January 2019, the conservative government of Chancellor Sebastian Kurz introduced a new form of indexing for its family benefits system that reduces payments if the recipient is from another EU country with a lower cost of living and their children still live in that country.
According to the European Commission, this violates EU laws on equal treatment, freedom of movement and social security equality. The Commission said it has notified the Austrian government several times that it was in violation of EU rules, but has decided to go to court after receiving a series of unsatisfactory responses from Vienna.
Kurz's government has argued that the system is just because it is more expensive to raise children in Austria. However, the Commission countered, the process of providing fewer benefits to foreign-born workers is still discriminatory because they are still working and contributing the same amount to the Austrian economy, paying the same taxes, and yet receiving less.
The Commission also said that while Austria was reducing benefits for workers whose children lived in a country where the cost of living is lower, the government made no similar calculation for the children of Austrians who work abroad in countries with lower costs of living.
Since Kurz first took office in 2017, his government has consistently rolled back funds and programs for non-native Austrians and become known for its hardline anti-immigrant stance.