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Unemployment benefits in France

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Unemployment insurance in France was first established in 1958. Benefits and contributions are set by the independent body called UNEDIC which is controlled equally by Trade Unions and Employer associations. Unemployment benefits are paid only to those persons who fulfill certain requirements.[1]

History

Unemployment insurance was established by Charles de Gaulle on 31 December 1958 and initially applied only to employees of the commerce sector. From the start the employers organization CNPF and the trade unions FO, CFTC and CGC signed up to the new system. The system was not initially part of the French Social Security system and caused one main union the CGT to not sign the accord. The system did not include any structure to help those unemployed to find work. Thus in 1967 the ANPE was created.

In the 1980s the rapid rise of unemployment brought the Unedic to the brink of collapse as the employer organisations refused to endorse an increase in contributions in order to balance the accounts of Unedic. Finally employer organisations and the unions agreed to reduce benefits and make them dependent on the length of contributions.

Since 1984 the state takes over from Unedic once a worker has used up his/her benefits. Beneficiaries receive the RMI (Minimum subsistence revenue).

In 1992 the system again fell into deficit and the partners decided to increase the required contribution period together with reductions for the long term unemployed. In 2001 the reductions were abandoned in favour of incentives to employ the long term unemployed (PARE) but the reduced contributions and rising unemployment bring the system into deficit again and the partners were again forced to revise the system reducing the length of benefits from 30 months to 23. The reduction leaves only half of the unemployed getting benefits from Unedic.

In 2005 Employment and Cohesion minister Jean-Louis Borloo introduced the social cohesion law which formally abolished the Agence nationale pour l'emploi (National employment agency) monopoly on employment placement. The act created 300 Maison de l´emploi (employment houses) housing all agencies responsible for helping the unemployed. In 2006 an accord again tightened requirements for claimants at the same time as introducing the single office principle and the monthly counselling of claimants. As of December 2008 the ANPE and Assedic were merging into the newly created Pôle emploi.[2][3]

Management of unemployment insurance

The partners (unions and employee organisations) meet every three years and agree on a new accord which primarily sets out the contributions assigned to the unemployment insurance scheme and the benefits to be paid to claimants for the next 3 years. Once the partners agree the government must pass an act of parliament to give it the force of law.

Although managed independently from the state the schemes revenues and costs are considered to be part of public revenue and expenditure and hence any borrowing required to finance the system is guaranteed by the state.

The Unedic accords

The first 20 years after its creation the scheme had no financial difficulties. During the 1970s increased unemployment pushed the scheme into deficit. In 2000 with the scheme showing a healthy surplus of 1.3 billion euros, the partners signed an accord which forecasts an 18 billion euro surplus over the following 3 years and consequently agree on a reduction in contributions in order to bring the scheme into equilibrium. A court decision in 2004 reinstated some benefits and called into question the financial plan of the scheme. In 2007 the Court of Appeal (Cour de Cassation) struck down the lower courts decision. The current accord was signed in February 2009 and sets out the following conditions for receiving unemployment benefits.

Requirements to receive unemployment benefits

Under the 2009 accord the following requirements must be met,

  • Claimants must be actively seeking work or be in an approved training programme.
  • Claimants must not be of retirement age
  • Claimants must be physically apt for work
  • Claimants must not have resigned voluntarily from his last job unless he can prove that after resigning he has effectively contributed for 91 days or has worked at least 455 hours.
  • Claimants must reside within Metropolitan France, Overseas departments or Saint-Barthelemy, Saint Martin or Saint Pierre and Miquelon.
  • Claimants must have contributed 122 days or 610 hours in the last 28 to 36 months (depending on claimants age).

Benefits duration

Benefits are payable for the same duration as the contributions but may not exceed 730[4] days. Minimum period is 122 days. Claimants over 50 may receive benefits for up to 1095 days.

Finances

Beneficiaries of unemployment benefit

  • 1958: 24,000
  • 1968 100,000
  • 1974: 200,000
  • 1976: 1,000,000
  • 1980: 2,000,000
  • 2011: 2,439,000
Financial results (millions d'euros)
Year Income Expenses Annual surplus/(deficit) Debt position
1985 7.614 7.829 - 0.214 xxx
1986 8.753 8.350 + 0.403 xxx
1987 9.195 9.248 - 0.054 xxx
1988 10.295 10.059 + 0.237 xxx
1989 11.601 10.858 + 0.743 xxx
1990 12.703 12.153 + 0.550 xxx
1991 13.108 14.340 - 1.231 xxx
1992 14.764 16.984 - 2.310 xxx
1993 17.829 19.169 - 1.341 xxx
1994 20.268 18.942 + 1.326 xxx
1995 20.936 17.521 + 3.415 xxx
1996 20.462 18.892 + 1.570 xxx
1997 19.629 19.957 - 0.328 xxx
1998 20.549 20.867 - 0.318 xxx
1999 21.332 21.748 - 0.416 xxx
2000 22.776 21.444 + 1.332 +2.965
2001 22.723 22.476 + 0.247 +2.144
2002 22.559 26.279 - 3.720 -1.554
2003 25.784 30.067 - 4.282 -5.836
2004 26.732 31.152 - 4.420 -10.260
2005 27.695 30.887 - 3.192 -13.452
2006 29.394 29.050 + 0.344 -13.108
2008 30.5 25.9 + 4.59 -4.99
2010 30.8 34.0 - 3.25 -8.9
2011 32.7 33.9 - 1.25 -11
2012 33.2 35.8 - 2.57 -13.9

[5]

See also

References

  1. ^ Marianne Arens and Françoise Thull (13 December 2000). "The reform of France's unemployment benefits scheme". World Socialist Web Site. Retrieved 23 June 2012.
  2. ^ Katrin Bennhold (2008-04-14). "France plans to tighten rules on unemployment compensation". The New York Times. Retrieved 23 June 2012.
  3. ^ David Hampshire. "French social security system explained". Paris Voice. Retrieved 23 June 2012.
  4. ^ "The French social security system - Unemployment insurance". www.cleiss.fr.
  5. ^ "2010 Financial Report" (PDF). Unédic. Retrieved 23 June 2012.
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