POLITICS & INSTITUTIONS - ECONOMY

Child allowance reform following court ruling



Currently, a child can benefit from the scheme only if a birth parent works in Luxembourg or they live there Shutterstock

Currently, a child can benefit from the scheme only if a birth parent works in Luxembourg or they live there Shutterstock

The right to child benefits will in future be linked to workers as opposed to the child, after Luxembourg’s legislation was found to be indirectly discriminatory.

Currently, a child can benefit from the scheme only if a birth parent works in Luxembourg or they live there.

The right is denied if it is only the stepparent or the partner of the parent who works in the grand duchy. In April 2020, while treating a dispute between a cross-border worker and the children’s future fund, the “Caisse pour l’avenir des enfants”, the European Court of Justice found the system did not conform with European law.

The proposed reform should guarantee equality between resident workers and cross-border workers, families minister Corinne Cahen (DP) said on Tuesday.

In an earlier release, parliament noted that the proposed changes would exclude 340 children, who currently benefit from the allowance. These would include households where both parents are students and not affiliated with social security, wealthy people who do not work, and European civil servants. The text calls for a transition phase for people already receiving family allowance to continue to do so until the child reaches adulthood.

Parliament said there were also 600 pending cases for benefits from non-eligible households. These cannot be processed under Luxembourg’s current legislation nor can they be refused under the Court of Justice ruling. The families commission is expected to meet again to discuss the reform further on 20 January.