The ruling is the latest against a series of measures imposed by a previous government, which included the far-right and sought to restrict benefit payments to foreigners.
The cuts to child benefits constitute “indirect discrimination on grounds of nationality which, in any event, is not justified,” the Court of Justice of the European Union (CJEU) ruled.
The specific case relates to reforms that came into effect in 2019 which indexed child benefits according to where the recipient’s children live.
This meant reduced payments for tens of thousands of eastern Europeans who work in Austria — notably in the care sector — but whose children remain in their countries of origin.
Family Minister Susanne Raab had said earlier this year that Austria had already made provisions in case the court ruled against the measures and the state needed to pay back the money it withheld.
In 2020 the European Commission, supported by six eastern member states, brought an action before the CJEU claiming Austria was “failing to fulfil its obligations”.
Former Austrian chancellor, conservative Sebastian Kurz, had said he hoped the cuts would save €114 million a year but in 2019 they
recouped € 62 million.
The former coalition also introduced benefit cuts for immigrants who failed to reach a certain level of German, but those measures were subsequently overturned by the Austrian courts.
Kurz’s government that introduced the cuts was brought down in a corruption scandal that engulfed the far-right in May 2019.
Kurz’s centre-right People’s Party (OeVP) still rules Austria. Their current coalition partners, the Greens, opposed the benefit cuts at the time.