Caritas and union criticize tax-advantaged child savings plan

Caritas and a trade union have criticized the Austrian government’s planned child investment account, saying it could favour wealthier families. ORF reports that the scheme would give each child a state-funded €500 starting balance.

Parents could add up to €5,000 a year. The invested money would be exempt from capital gains tax and account management fees. The account would run until the child turns 18, when the money could be withdrawn.

Caritas director Walter Schmolly questioned the plan after the government recently said a proposed child basic income could not be financed within the budget. He said the investment account was a good idea in principle, but argued that if the government could fund only one measure, it should choose the one that helps children with the fewest opportunities.

The trade union called the scheme socially unfair, saying its tax benefit would increase with the amount deposited and therefore favour affluent families. It also warned that the government could lose hundreds of millions of euros in tax revenue over the long term.