Michael Fuchs - Simulation of an introduction of a basic security for children in Austria

• Presenting author: Michael Fuchs (European Centre for Social Welfare Policy and Research)

• Authors: Michael Fuchs, Felix Wohlgemuth

• Session: B02C - Basic Income - Tuesday 11:00-12:30 - Senate Hall

• Slides: PDF

Children who grow up in poverty begin their lives with numerous disadvantages that may negatively affect their entire life course. To avoid the vicious circle that “inherits” poverty from one generation to the next, the paper analyses the effects of an introduction of a basic security for children below 18 years in Austria. While even increasing the hitherto existing level of universal financial support for all children (universal component of EUR 285 per month and child, replacing family allowance and child tax credit), families with low incomes would particularly benefit from the reform (means-tested component from 0 up to EUR 587 per month and child depending on taxable family income, replacing supplements for children within social assistance). For the analysis, the tax-/benefit microsimulation model EUROMOD with 2022 policies is used based on EU-SILC 2021 data. While the additional costs for the basic security for children would amount to around EUR 4.6 billion, the at-risk-of-poverty rate of the total population would decrease by 5 percentage points, and that of children below 18 years by as much as 14 percentage points to a low 3%. Looking at the change in weighted disposable household income, the introduction would favour persons in the lower income deciles, especially in the lowest three deciles.