Sunday 25 February 2018

Germany wants benefits cut

German Chancellor Angela Merkel. Photo: Leonhard Foeger/Reuters
German Chancellor Angela Merkel. Photo: Leonhard Foeger/Reuters

Justin Huggler in Berlin

Germany is to press for radical changes to the way it pays child benefit to workers from other EU countries in an attempt to curb benefits tourism.

The reforms, aimed at those who work in Germany but claim benefits for children living in their home countries, are inspired by the deal David Cameron was offered in the run-up to the Brexit vote.

Under a draft law being prepared, the level of benefit would be linked to the cost of living where the children live. A Polish citizen living and working in Germany but claiming benefit for a child in Poland would see his payments halved from €192 a month to €96.

But Angela Merkel's government may have a fight on its hands to implement the reforms, which are illegal under EU law. Germany is lobbying to have the rules changed but is facing opposition from the European Commission.

The German finance ministry believes the reforms could save €159m a year. The country pays benefits for more than 184,000 children living in other EU member states, mainly Poland, Romania and Croatia.

Under current EU rules, member states must pay child benefits at the same level regardless of where the child actually lives. The reforms are essentially the same as the deal the EU offered Mr Cameron last year. But the deal was quietly dropped after the referendum result and the EC now opposes Germany's plans.

"In February 2016, European leaders agreed to allow differentiation of child benefits for citizens of another member state in the event of Britain remaining in the EU. The European Commission was supposed to present a proposal to amend EU law accordingly. But after the results of the referendum, the Commission has regrettably refrained from doing so," a spokesman for the German finance ministry said.

Germany is lobbying the Commission to follow through with the reforms proposed under the Cameron deal. But that deal was only agreed in order to avert Brexit under strong protest from several Eastern European countries.

Irish Independent

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