Kindergeld

Immigrants’ benefit claims for children in home country raise German concerns

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Europe is her sandbox. Source: Reuters

A sharp rise in immigrants claiming benefits for children living elsewhere in the European Union has raised alarm among German cities, who warn that “social tourism” is undermining the country’s generous social benefit system.

It is perfectly legal under EU law to collect child benefits in Germany for children living in, say, Romania. The problem is that the payments, geared to living costs in Germany, go a lot further in Romania, providing ample incentive for fathers to leave their families for work in Germany.

But efforts by some of the richer EU countries – Austria and the Netherlands, along with Germany – to establish some sort of indexing for the benefits have run into opposition from the Brussels bureaucracy, as well as a majority of EU member states.

The number of children receiving “Kindergeld,” or child-support money from Germany, while living elsewhere in the EU totaled 268,336 in June, a 10.4 percent increase from 243,234 at the end of 2017. The €343 million ($397 million) paid out in benefits to these children in 2017 was nearly 10 times the amount in 2010.

Berlin is ‘asleep’ on issue

The increase is largely due to the accession of East European countries into the EU, benefiting from the bloc’s free movement of workers to seek higher pay and benefits in Germany.

“The German government is asleep on this problem,” Sören Link, the Social Democratic mayor of Duisburg, told DPA. “It must finally do something about economic refugees in Europe.”

The national chair of the Social Democratic Party, Andrea Nahles, has called a meeting of mayors from the cities most affected for the end of September. “We won’t leave the cities alone on this,” she said.

The euro-skeptic Alternative for Germany (AfD) has made the benefits payments a political issue as the right-wing party continues to increase its support. The party has queried the government about it on several occasions and finds it “scandalous” that nothing has been done. “Social tourism at the expense of German taxpayers” must end, said René Springer, the AfD lawmaker behind the queries.

Indexing fails to gain traction

Germany has been trying to push through an EU-wide measure to index the child benefit payments to the cost of living where the children actually reside. But the initiative has gained little traction. Measuring the relative costs across 28 countries would be complicated, and the administrative expense alone would be considerable.

In the European Parliament, the conservative European Peoples Parties (EVP) are pushing indexation as well, but the Social Democratic parties, including German SPD deputies, are opposing it. Sven Schulze, the point man for those favoring indexation, told Handelsblatt it is “hypocritical” that the SPD leadership in Berlin is promising help while the deputies in Brussels are blocking a solution.

There is little evidence of any fraud in all this, according to German authorities. There are some suspicious cases, especially in North Rhine-Westphalia, but so far only about 40 cases of fraud involving €400,000 in payments have been found in Ruhr cities. These have usually involved counterfeit birth certificates for children who don’t exist.

The German Association of Cities is urging the Berlin government to do something. “In my opinion, it’s not inhumane in those cases where someone works in Germany and his children live in Romania to pay the child benefits at the Romanian level,” said the group’s executive director, Helmut Dedy.

Gregor Waschinski covers health policy and social benefits for Handelsblatt in Berlin. Till Hoppe is a Brussels correspondent and Martin Greive is a correspondent in Berlin. Darrell Delamaide adapted this article into English for Handelsblatt Global. To contact the authors: waschinski@handelsblatt.com, hoppe@handelsblatt.com, and greive@handelsblatt.com

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