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Am I entitled for a family allowance if my family (a husband and children) don't live in the same country where my host institution is?

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Yes you are. Source: Been in the same situation.

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You have to read carefully the instructions, I think that it doesn't matter where they live, you have to show proofs that you are part of a family, but I do not think that when you start working, the host asks for proofs that they have moved to the host country. But I'm not 100% sure. Check also with the host institution, I am sure they already had similar experiences.

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