Formal opposition from the state council effectively blocks the bill from being voted in parliament without further amendments Photo: Matic Zorman / Maison Moderne

Formal opposition from the state council effectively blocks the bill from being voted in parliament without further amendments Photo: Matic Zorman / Maison Moderne

Luxembourg’s Council of State has issued harsh criticism of plans to reform the payment of child benefits put in place after the European Court of Justice had said the country must stop treating residents and cross-border workers differently.

The European Court of Justice in April 2020 had who had sued Luxembourg over their stepchild not being eligible to receive a child allowance. Dependent stepchildren of residents can receive the benefit and the ECJ said Luxembourg must treat residents and cross-border workers equally.

But formal opposition from the state council has hailed down on a draft law submitted by the government to reform the children’s allowance.

Under the , the state wants to tie the benefit to the parent who is affiliated with the Luxembourg social security system, whether they live in country or are cross-border workers. This would create equality between residents and non-residents but limit the benefit to biological or adopted children of that parent, effectively excluding stepchildren.

However, the new regime would also prevent a range of other guardians--such as foster parents, grandparents or in-laws looking after children in the family--from accessing the child allowance. Employees at the European institutions or other international organisations in Luxembourg who aren’t affiliated with the social security system as well as students would be also excluded.

At the same time, under a loophole, biological parents could receive the child allowance even if they’re not looking after their kid, the state council said in an opinion submitted last week.

The council reviews all draft laws before they can come to a vote in parliament. It checks whether the proposals comply with Luxembourg’s constitutions and other, higher laws and international treaties.

The council can issue objections--the highest of which is a formal opposition--effectively blocking the bill from a vote until lawmakers clean up the draft law. The council issued a series of formal oppositions to what it called a “change in paradigm” in how the child allowance is allocated.

Limiting the definition of parents--and thereby excluding other guardians--is “neither rationally justified nor proportionate”, the council said. Under the current proposal, the allowance rather resembles a “parental allowance” or “child bonus” that doesn’t meet the purpose of serving the interests of the child.