The proposal was passed by the Federal Cabinet in April, but no further action has been taken. In an attempt to avoid Brexit, the European Commission addressed similar concerns coming from the UK during David Cameron’s government by negotiating a compromise package in February 2016. It cannot be ruled out that the issue will not become part of the German federal election campaign because many EU critics believe the EU is acting with constant malice.
Cuts of up to 75 percent
The intention is to reduce child benefits paid to EU foreigners residing in Germany to a level that reflects the actual living costs of the country where the child lives. This would mean a 50 percent reduction in child benefits paid in Germany for residents from Romania, Poland, Hungary, Croatia and Bulgaria, and a 75 percent cut for Greece, the Czech Republic and Cyprus. Full benefits would be paid to residents from Belgium or Sweden. In 2016, Germany paid nearly 537 million euros in child benefits to residents in Germany whose children live in another EU country.
Legal loopholes encourage exploitation
Putting aside social politics, many experts believe that legal loopholes encourage the system to be increasingly exploited due to the growing prosperity gap. Even using the EU tax identification number as a prerequisite for receiving child benefits is of limited effectiveness. There is widespread corruption in many areas of Southern and Southeast Europe. There are also certain groups of people who have probably never been recorded for tax purposes in their home country because they have only worked cash-in-hand. These practices differ greatly from those in Germany and other EU countries. Even proof of parentage documentation, proof of residence certificates or birth certificates are susceptible to being bought or forged without a factual basis.