According to COFOG (Classification of Functions of Government), in 2016 the Austrian state spent a total of 8.119 billion euros on the activity Families and children (COFOG group 10.4), i.e. 4.53% of government spending and 2.30% of GDP (source: Statistics Austria).
The key instruments of family income support in Austria are the benefits paid out by the Family Burden Equalisation Fund (FBEF). Founded on the basis of Fed. Gaz. No. 376/1967, this fund is managed by the Federal Ministry of Finance (BMF) with the aim of partially compensating for the additional cost of children incurred by families.
In total approx. 7.1 billion euros was spent on the fund in 2016, with almost half (3.4 billion euros or 48.8%) being used to finance family allowance. Around one third (2.4 billion euros or 34.4%) was provided by the FBEF for further cash benefits and benefits in kind such as maintenance payment advances, family counselling, family hardship payments, family hospice hardship payments, travel allowances and free travel for schoolchildren and apprentices, in addition to the school book campaign and remittances.
The remaining 1.2 billion euros (16.8%) went on childcare allowance (incl. baby bonus, mother-and-child pass bonus and early childhood benefit).
In addition to child-relevant family benefits from public authority funding in the context of payments from the FBEF, families are also supported by measures based on tax exemptions. In 2015 this resulted in a total of some 550 million euros of indirect support, corresponding to 7.9% of the resources provided by the FBEF. The sole earner deduction accounted for 210 million euros (38.2%) and the single parent deduction for 120 million euros (21.8%). 110 million euros (20.0%) of tax deductions were claimed in each case through child tax credit and tax exemptions for childcare costs (source: figures supplied by BMF).
Development
Since 1980 the total budget of the Family Burden Equalisation Fund (FBEF) has more than tripled, rising from the equivalent of 2.1 billion euros to 7.1 billion euros in 2016.
Growth of 63.7% (4.3 billion euros) has been recorded since 2000, a figure that roughly corresponds to the nominal increase in economic output over the same period. This in turn means that the increase in resources for the FBEF was well above the inflation rate: adjusted for inflation, a rise in real terms of around one fifth (21.1%) since 2000.
The jump in the time series seen in 2008 is presumedly due to abolition of the responsibility of local authorities for paying family allowance, and also to the associated corrections (see for example here).
The most important benefit provided by the FBEF is family allowance, which accounts for the largest share of the fund, although levels are declining. In 1980 family allowance accounted for 79.1% of the fund spend, falling to an average of 64.1% in the 1990s before dropping to 57.1% between 2000-2009. It was not until 2012 that the resources of the FBEF spent on family allowance fell to less than half for the first time – totalling 48.8% in 2016. Since 2000 the funding allocated to family allowance increased by 27.1%, rising from 2.7 billion euros to 3.4 billion euros. This increase was however slightly below the inflation rate, mainly due to the reduction in the number of people receiving this benefit (see main article Family allowance).
As since 1990 the share of spending on travel allowances and free travel fell from 9.1% to 6.3%, and on school books from 2.3% to 1.5%, there was a sharp rise in the other two types of expenditure over the same period: The item „Other“, which comprises benefits such as hardship payments, family counselling centres, maintenance payment advances and remittances, increased, with major fluctuations, from 14.7% in 1990 to 26.5% in 2016. The most significant change here was the share of the fund allocated to allowances for parental leave (being phased out) and childcare, which averaged 1.9% between 1990-1999. Since then, this has averaged 17.3% of the FBEF (for further details see main article Childcare allowance).