The reason is an increase in the number of children from eastern Europe receiving the allowance.
Children from Croatia whose one or both parents live and work in Germany, Austria or some other EU member receive millions of euro in child allowance each year. If the German and Austrian government's plans to index the amount of the child allowance to the cost of living in the country where the children live are implemented, the amount will be halved, reports Večernji List on August 13, 2018.
In Germany, the issue of allowance for children living abroad is again in focus after the local officials warned about an increase in the number of children in this category this year, which represents a burden for the German budget as part of the so-called “social benefits tourism" issue, when people from poorer EU countries move to the richer ones in order to receive social benefits.
SPD chief Andrea Nahles announced a meeting with mayors of some of the worst-affected cities. The German finance ministry announced that in June it paid out the allowance for the record-breaking 268,336 children. This figure represents an increase of 10 percent compared to 2017, and a large jump since 2007 when only 61,615 children living abroad received the German allowance.
Numbers show that most children receiving the allowance live in Poland, followed by Croatia and Romania (17,000 each). The first and second child receive 194 euro, the third child gets 200 euro, and the fourth and other children get 225 euro per month. Many believe this is too much and that the amount should be adjusted to the standard of living in the countries where the children actually live.
Children in Croatia, Bulgaria, Romania, Poland and Hungary could receive just one half of the German allowance, while children in Greece, the Czech Republic and Cyprus would receive 75 percent of the German allowance. The European Commission has once already stopped the German plan when it announced that it was in contradiction with European laws and constituted the discrimination of EU citizens. A spokesman for the German ministry of finance now says they are “working with the Commission on a common European solution.
Despite the European Commission's objections, another state – Austria – is continuing with the procedure to amend the law which would include children from Croatia who receive about seven million euro a year. The amount of allowance in Austria ranges from 112 to 162 euro a month, and it includes some 132,000 children living abroad.
Austrian Foreign Minister Karin Kneissl recently explained that they are preparing a national proposal for indexing the child allowance. The government adopted the motion on May 2 and the parliament will make the final decision. “Family allowance is not part of the salary, nor is it an insurance fee. Its purpose is to partially refund the cost of living for children. Since costs vary across the EU, the indexing will contribute to the adjustment of the amount,” said the minister.
Translated from Večernji List (reported by Sandra Veljković).
