Czechs and Slovaks sue Austria over cuts in family benefits

Bratislava, Slovakia – An increasing alignment of views between the leaders of the Visegrad Group (Slovakia, the Czech Republic, Poland and Hungary) and Austria has pushed some to call for the V4 to add Vienna to its ranks. But the controversy over cuts in family benefits and allowances for foreigners living has highlighted the recurrent and long-standing gap between Austria and its Central European neighbors.

Around a thousand Czech and Slovak citizens working in Austria with children abroad have decided to sue the Austrian government over the cuts in family benefits and allowances that came into force at the beginning of the year.

According to the new rules presented by Austria’s ruling coalition last year, the value of the family benefits will be indexed on the living costs of the country where the child or children live. This new measure would amount to cut the benefits – which start at around 114 euros per month for one child – for children of foreigners, mostly from Central and Eastern Europe – working in Austria.

According to Reuters, Austria transferred 273 million euros abroad to EU and European Economic Area countries in benefit payments for over 130.000 children in 2016.

Many Czechs and Slovaks have moved to Austria over the last few years, often working there only on a part-time basis, lured by higher salaries and better benefits, while their children remained in their home country. Bordering eight countries, where wages are often much lower, Austria has attracted many workers from Central and Eastern Europe, most notably in the healthcare and construction sectors where important labor shortages crippled Austrian companies’ activities and growth.

But as The Slovak Spectator reports, “up to 30% of Slovak and Czech nurses might leave their jobs in Austria because of the new rules”. Regardless of the Austrian controversial measure, this is reflective of a more general trend of Central and East European workers increasingly contemplating a return back home, where wages are booming along with growing job vacancies, after working in Western European countries. Contrary, for instance, to Poles working in the U.K., the geographic proximity of those countries makes this return all the more likely.

Austria also faced proceedings from the European Commission over the slashing of family allowances, which many experts see as discriminatory and a violation of the free movement of people in the EU – especially since many categories of EU workers in Austria have the same social security and tax obligations as local workers.

From the very start, the Slovak government voiced its opposition to the measure: “Our citizens who work in Austria, and work there legally, pay contributions to Austrian funds, therefore we expect they would receive appropriate benefits from these funds”, Slovakia’s then-acting Foreign Minister Ivan Korcok said in January last year. But it has been waiting for conclusions from the EU: “The European Commission is competent to solve the issue on behalf of the member countries”, Slovak Labor Ministry spokeswoman Veronika Husárová said.

In 2017, Germany presented a similar plan but eventually dropped it after facing pressure from EU partners and the European Commission.