Child Benefit and Family Allowance: No Valorization

Family allowance and child benefit will not be adjusted in the coming two years. Family Minister Claudia Plakolm (ÖVP) announced this in writing on Wednesday afternoon. She also announced changes in the payments for Ukrainian refugees as part of the budget consolidation. Any potential successor regulation for the agreement expiring in November must contribute to the budget and bring more Ukrainians into the labor market.

It was only in March that the National Council decided to extend the receipt of family allowance and childcare allowance by Ukrainian refugees until the end of October. A few days later, Plakolm announced a task force to evaluate the current rules, as there was suspicion of abuse in certain areas of receipt.

Stocker defended savings measures for families

Federal Chancellor Christian Stocker (ÖVP) had already defended the upcoming savings measures for families after the Council of Ministers. "No one will receive less, but the increase will be suspended for two years," he said in the press foyer after the Council of Ministers regarding the question of a stop in the adjustment of family allowance. The VP leader reminded that the annual adjustments did not even exist until recently.

It was already confirmed that the adjustment of the child tax credit would be suspended for two years. Now child benefit and family allowance are added.

Current values for family allowance

The latter benefit is paid out in tiers according to age. The current values are: 0-2 years: 138.4 euros per month, 3-9 years: 148 euros per month, 10-18 years: 171.8 euros per month, from 19 years: 200.4 euros per month. According to the family department, an average of 4.20 euros per month will not be paid out due to the non-adjustment. This will save more than 100 million in 2026 and more than 200 million in 2027. For childcare allowance, 30 million will be saved next year, and 55 million in 2027. The adjustments for this year have already been made.

The handling of projects will become more efficient in the Family Ministry. Up to ten percent less will be spent on project-based funding. Additionally, administrative expenses will be reduced, including less spending on printed materials.

Stocker emphasized that in times of tight resources, measures would naturally be taken that one would prefer not to take. However, Austria has one of the highest family support systems in Europe. NEOS leader Beate Meinl-Reisinger pointed out that something is being done for families now, namely with the expansion of childcare and education services.

In any case, the largest part of the savings exists within the system itself. Enormous efforts are being made at all levels, explained Meinl-Reisinger. Straightening out the budget means nothing other than taking responsibility for taxpayers and future generations.

Vice Chancellor Andreas Babler (SPÖ) did not want to preempt the budget speech of Finance Minister Markus Marterbauer (SPÖ) next week and therefore refrained from commenting on details. He basically stated that he supports the jointly agreed savings.

Opposition reacted outraged

The opposition reacted outraged. FPÖ social spokesperson Dagmar Belakowitsch said it was unacceptable that Austrian families and single mothers had to accept financial losses while social benefits were distributed to people who had never paid into the Austrian system. If social benefits were paid exclusively to Austrian citizens, the suspension of valorization would not be necessary.

The suspension of valorization is nothing more than a cut for children and families, criticized Barbara Neßler, family spokesperson for the Greens, and Jakob Schwarz, budget spokesperson for the Greens. The automatic adjustment for inflation ensures fairness and predictability - especially for families with low incomes.

Criticism also from NGOs

Criticism also came from NGOs. According to SOS Children's Villages, the government's decision affects burdened families in an already tense situation. "Many families are already under enormous pressure - due to high food prices, rising rents, or lack of childcare options," said Managing Director Christian Moser. In a country where every fifth child is at risk of poverty, there should be no "factual cuts in support services."

Caritas Secretary General Anna Parr stated that it is clear that there is no way around savings in Austria now. However, it is also clear that this should not affect the groups most at risk of poverty. Thus, the suspension of valorization is a regrettable step backward.

"One should adhere to laws as much as possible"

Currently, part of the budget consolidation is not reopening the civil service agreement already decided last year for 2026. It is legally agreed that salaries will be adjusted 0.3 percent above inflation next year, after having remained below inflation by this amount this year.

Stocker left himself a back door. If there is a general willingness to exercise restraint in the collective bargaining negotiations of the social partners, one could also look at the remaining agreements. But in itself, the civil service increase is legally decided - "and one should adhere to laws as much as possible." State Secretary Alexander Pröll (ÖVP) had said before the Council of Ministers that civil service negotiations usually take place in the fall. The question could still be considered internally.

(APA/Red)

This article has been automatically translated, read the original article here.