Austria proposes 500 euro initial capital for newborns

The Austrian government is proposing a “Zukunftsdepot” (future deposit) program intended to provide an initial capital of 500 euros to every child born in the country starting in 2027. Under this plan, the state would provide the initial sum, and parents would have the option to contribute up to 5,000 euros annually. The funds would be invested in low-risk Austrian bank accounts for 18 years, with all returns and savings being exempt from capital gains tax until the child reaches adulthood.

The proposal has faced significant internal government friction and external criticism. The Ministry of Finance has warned that the January 1, 2027, start date is likely unfeasible due to a lack of sustainable long-term funding beyond 2028 and the fact that tax exemptions are not currently budgeted. Additionally, the program's success relies on banks voluntarily offering these accounts without fees.

Economists and opposition politicians have criticized the measure as potentially regressive. Critics argue that wealthier families will benefit disproportionately from the tax exemptions through higher personal contributions, while lower-income families may be unable to add to the savings. Some experts warn that the loss of tax revenue could lead to social imbalances.