French Government Crack Down on Benefits Claimants

French President Emmanuel Macron's government has unveiled plans to make it more difficult for the unemployed to claim benefits, as part of an overhaul of France's labor market that aims to boost the nation's economy.

Labor Minister Muriel Penicaud said Tuesday that the changes were "tough, yet important."

Unions have denounced the plans as unfair and damaging to the country's social security system.

The planned changes extend the period that people have to work to be entitled to unemployment benefits and reduces the amount that wealthier workers can receive after six months out of work.

France's unemployed now get, on average, over 1,000 euros ($1,118) per month -an amount that can reach a maximum of 6,200 euros ($6,936) for two consecutive years.

Another measure plans to penalized companies that use a lot of short-term contracts.

Only salaried persons are entitled to unemployment benefit.

Since 1st Oct 2018 the social security contribution paid by employees for unemployment cover has been abolished.

Although, business owners are not eligible for unemployment benefit, there a plans under President Macron to grant entitlement to self-employed persons, although the initial promises on this are receding. It is possible to take out private insurance, but it is expensive.

As a salaried employee, if you lose your job you do not automatically have a right to unemployment benefit. You will need to meet certain conditions.

Those conditions are that:

• You did not leave your job voluntarily;
• You have worked for at least four months;
• Be registered as a job seeker with Pôle emploi;
• Be physically capable of work;
• Be actively searching for work;
• Not be in receipt of a full State retirement pension.

There are situations where those who have resigned can still retain a right to unemployment benefit. They are:

• Spouse gets a job in another region of the country;
• Marriage or civil partnership, in which the new couple change their place of residence, which must take place within two months of each other;
• Having lost a job, another job immediately found, from which the person resigns within 91 days;
• Resigns from one job to take another, which employer ends within 91 days (provided three years paying unemployment contributions)
• Other unspecified legitimate reason.

Those whose contract is terminated or naturally comes to an end, and who receive a lump sum severance payment, must wait 6 months before they can be entitled to unemployment benefit. A rule that concerns primarily senior managers.

1. II. Duration of Benefits

The right to unemployment benefit is based the amount of time you have paid unemployment contributions.

The following table shows the minimal period of contributions, and the maximum period of cover. The actual level of cover will otherwise be the period of employment during which you paid unemployment contributions.

It is also possible to 'roll-over' unused entitlement if you obtain employment prior to using current entitlement, but then subsequently find yourself unemployed. It is called droits rechargeables.

The duration of benefits for those aged 53-54 increases to 36 months if the applicant undergoes a training course.

Those aged 60+ are not entitled to the benefit.

Level of Benefit

The level of unemployment benefit you receive is calculated with reference to your previous salary.

Broadly speaking, your benefit entitlement is a percentage of a reference daily rate, called salaire journalier de référence (SJR). The SJR is calculated from your previous salary.

Thus, if you earned €20,000 in the previous 12 months, then the SJR would be €20,000/365 days = €55 per day.

You would then be entitled to either 40.4% SJR + €11.92 per day (2019), or 57%, whichever was produced the larger amount.

The minimum amount payable is €29.06 per day and the maximum amount cannot be greater than 75% SJR up to a max of €248 per day. However, if you are on a training course prescribed by Pôle emploi the minimum is €20.81 per day. (2019)

If the monthly salary was less than €1,154, then you are entitled to unemployment benefit equal to 75% of your previous gross salary.

Those who become unemployed as a result of redundancy are entitled to enhanced benefits, and there are also particular rules for seasonal workers and those in the entertainment industry.

In addition, an unemployed person who takes part-time work or a contract of short duration can continue to be entitled to receive some of their benefit.

Other Benefits

In the event that your unemployment benefit does not reach a minimum level, then it is possible to obtain entitlement to other benefits, such as Revenu de Solidarité Active (RSA), as well as housing benefits.

There is also entitlement to free health cover through the CMU Protection Complémentaire (CMU–C).

Social Security Contributions

Unemployment benefits do not entirely escape liability to social security contributions, in particular the cotisations sociales CSG and CRDS.

The rate of CSG is 6.2% and the rate of CRDS is 0.5% on 98.25% of the benefit.

There is complete exemption from these charges where the cotisations sociales in total or in part reduce the net level of the benefit to less than €51 a day (2019) a figure related to the minimum wage.

Neither are social charges payable if income in the reference year was below €11,128 (2019) for a single person, a threshold increased by around €3,000 for each addition half-part.

A reduced rate of 3.8% applies for those whose taxable income in the reference year was between €11,128 and €14,548 for a single person, a threshold increased by around €3,000 for each addition 'half-part'.

The 'reference year' for the income test are two years previously, ie for 2019 it is your income for 2016 as notified on your 2017 tax notice.

CSG is deductible against income tax at the rate of 3.80%, assuming you pay income tax.

A social security contribution of 3% of the SJR is levied to finance the complementary retirement pension, except where it would reduce the benefit to below €29.06 per day.

No health contributions are payable, except in Alsace-Moselle, where they are levied at the rate of 1.6%, except for those below the above income thresholds

Payment of Unemployment Benefit

Unemployment benefit is not offered immediately at the end of an employment contract.

There are two different points of departure.

First, there is a delay of seven days except for those who become unemployed again within twelve months of first becoming unemployed.

Th 7-day period may be extended, related to the payment by the employer for paid leave not taken before departure, as well as a delay due to any compensation package that might have been received at the end of the contract.

Once payment starts it is then paid every month.

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