Family allowance (Familienbeihilfe) and childcare benefits (Kinderbetreuungsgeld) in Austria will not be adjusted for inflation in the next two years. Family Minister Claudia Plakolm (ÖVP) announced the measure in a written statement on Wednesday. As part of broader budget consolidation efforts, she also confirmed changes to payments for Ukrainian refugees. A new follow-up arrangement for the current aid agreement, which expires in November, must help reduce spending and integrate more Ukrainians into the labor market.
In March, the National Council extended access to family allowance and childcare benefits for Ukrainian refugees through the end of October. Shortly afterward, Plakolm launched a task force to review the regulations amid suspected misuse.
Freezing Payments, Not Reducing Them
Chancellor Christian Stocker (ÖVP) defended the cuts following a cabinet meeting. “No one will receive less, but the annual increase will be paused for two years,” he said, adding that indexation only began recently. The adjustment freeze also affects the childcare supplement (Kinderabsetzbetrag), which had already been confirmed earlier.
The average impact of the freeze is around €4.20 less per month per child. Age-based payments currently stand at:
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Ages 0–2: €138.40
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Ages 3–9: €148
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Ages 10–18: €171.80
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Age 19 and older: €200.40
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By suspending indexation, the government expects to save over €100 million in 2026 and more than €200 million in 2027. For childcare benefits, the savings are projected at €30 million in 2026 and €55 million in 2027.
Additional Cuts in Project Funding and Administration
The Ministry of Families also plans to streamline project implementation and reduce administrative costs, including less spending on printed materials and project-based grants.
Stocker emphasized that difficult decisions are necessary in tight fiscal times, but Austria still has one of the highest levels of family support in Europe. NEOS leader Beate Meinl-Reisinger acknowledged the freeze but pointed to increased public investment in childcare and education services as a counterbalance.
According to her, most savings come from internal structural reforms. Fixing the budget, she said, is an act of responsibility toward taxpayers and future generations.
Vice Chancellor Andreas Babler (SPÖ) declined to comment in detail ahead of Finance Minister Markus Marterbauer’s upcoming budget speech. However, he affirmed his support for the agreed-upon consolidation package.
The government currently does not plan to reopen negotiations on the civil service pay agreement for 2026. This agreement includes a 0.3% wage increase above inflation for next year. Stocker left the door open, saying that if unions show restraint in collective bargaining, the government may reconsider other agreements as well. State Secretary Alexander Pröll (ÖVP) added that civil servant negotiations typically occur in the fall, leaving time for further review.
