The European Union is taking action against Austria for tying the value of child benefits to the cost of living in the country where those children reside, saying it discriminates against EU citizens working in Austria.
EU Social Affairs Commissioner Marianne Thyssen said on January 24 that Vienna's move was "deeply unfair" because it means many EU citizens paying social security and taxes in Austria "would receive fewer benefits only because their children are living in another member state."
She said that "such a mechanism is not allowed under EU law."
The commission is giving Vienna two months to respond to its "letter of formal notice," a first step in possible legal action.
Austria estimates the measure will affect 132,000 children in a number of countries. The move has attracted sharp criticism from EU member states like Romania. More than 80,000 Romanians live and work in Austria.
The move was announced by Chancellor Sebastian Kurz on January 3, less than a month after a new ruling coalition led by Kurz's conservative People's Party struck a deal with the Freedom Party, making Austria the only Western country with a far-right party in the government.
"It is an unfairness built into the system that, for two children who do not even live in Austria but in Romania, roughly 300 euros a month are transferred to Romania and that is almost the average income there," Kurz told reporters on January 3.
Romania's average salary is 510 euros ($630), according the National Institute of Statistics in Bucharest.