Benefits

Introduce

Though the creation of the system and its founding principles date back to 1945, today’s social security system is largely the product of the Ordinance of 1967. Social security encompasses several dozens of schemes and nearly a thousand different organisations. It is also divided into several branches:

- health, maternity, disability and death,
- family,
- old age pensions,
- industrial injury,
- collection of contributions.

Apart from statutory benefits, the first three branches also deliver a wide range of social programmes.

The main component of the social security system is the general scheme (Régime général), which covers workers in commerce, services and industry. It also provides insurance coverage for (among others) students and other individuals sharing the same status as private-sector salaried workers. About 85% of the population is covered by the general scheme part of France’s social security system.

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Health Insurance

Practically all of the population is covered by a health insurance scheme, either as a direct beneficiary, a dependant (spouse or child of a beneficiary) or other individual with no personal entitlement to benefit. With the exception of insurance policies taken out on a voluntary basis, coverage is work-related. In the case of salaried workers for example, to qualify for cover, an individual must generally have worked at least 120 hours during the previous month or 600 hours in the previous six-month period.

The statutory scheme is run by the National Health Insurance Fund for Salaried Workers (CNAMTS). Benefits in kind (i.e. the reimbursement of the cost of inpatient and outpatient care, drugs and medical laboratory tests) account for 92% of expenditure against 8% for cash benefits (per diem allowances for workers on sick, maternity or industrial-injury leave, and disability benefits).

The entitlements of insured persons are recorded on a personal smart card known as the carte Vitale. This contains all relevant data on the beneficiary’s health insurance rights and obviates the need for upfront payments in hospitals, doctors’ surgeries and pharmacies.

This scheme covers farmers and salaried workers in the agricultural sector. It provides benefits in kind equivalent to those delivered by the general scheme. Cash benefits are paid only in the case of industrial injury.

This covers tradespeople, artisans and independent professional people. On 1st January 2006, the different schemes covering these categories came together under the Social Security Scheme for the Self-employed (RSI). At the same time, health insurance for independent professionals such as doctors and lawyers, continues to be managed by a special scheme, the National Health Insurance Fund for the Self-employed (CANAM). Benefits in kind are identical to those provided by the general scheme and cash benefits are progressively coming in line with those enjoyed by salaried workers.

The special schemes cover certain public sector employees and employees of the major national companies (SNCF, RATP, EDF, GDF, etc.) as well as specific professional groups like notary clerks and the clergy – about 100 schemes in all. They are mostly a legacy of the past, or schemes that enjoy more favourable terms and have sought to remain separate from the general scheme.

Some of the special schemes cover all risks, others only some (retirement benefits for example). For the other risk types, beneficiaries are covered by the general scheme. Overall, the special schemes provide better coverage than the general scheme, hence the difficulty in attempting to merge the two, despite the small number of recipients of some of the special schemes.

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The Complementary Health Insurance Schemes and the Universal Insurance Coverage programme

More than half of the population has insurance coverage from a mutual benefit fund (mutuelle), provided through the workplace and financed by the employee and the employer. Complementary health coverage is also provided by private insurance companies and providential institutions. The reimbursement rate will depend on the contract subscribed with the insurer and the contribution paid.

The CMU (couverture maladie universelle) covers all legal French residents who do not qualify for health cover or cannot afford complementary health insurance. Today more than 4 million people are covered by the basic or complementary CMU, the former providing benefits analogous to those offered by the statutory health insurance system, and the latter covering the co-payment (i.e. the portion of the health care cost not reimbursed by the statutory system and known as the ticket modérateur).

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Old Age Insurance

The first retirement system, created for the French Navy, was introduced by Colbert in 1681. The state began addressing the question of retirement in the twentieth century. In 1945, a scheme covering all salaried workers was introduced with the beginning of social security. Operating on a work-related basis, the different schemes are financed by earnings-related contributions. In the case of salaried workers, contributions are shared by the employee and the employer.

The French pension system has two tiers, both compulsory: the statutory general scheme and the statutory complementary scheme. In recent years a third tier (régime surcomplémentaire) has been introduced, which is optional and based on individual or group pension savings.

Salaried workers

The general social security retirement scheme, administered by the National Old Age Pension Fund for Salaried Workers (CNAVTS) covers employees in commerce, services and industry. Today there are 17 million contributors and 11 million pensioners in the scheme. In France, the statutory retirement age is 60, and 40 years of contributions are required to qualify for a full pension. Gaps in employment due to joblessness or ill health for example, may also be taken into account in certain cases.

The size of the pension depends on basic salary (up to a specified ceiling) and the periods of insurance under the basic schemes. The amount paid is higher for parents having raised three or more children.

Following the death of a pensioner, a replacement pension is paid to the surviving spouse under a means-tested scheme.
The Act of 21 August 2003 provides for the extension of the period of contributions required for a full pension. This is to be increased to 41 years in 2012 and (in principle) 41.75 years in 2020. Specific provisions apply however for workers entering employment aged 17 or under.

Other pension schemes

When the current retirement system was created in 1945, the social partners and different socio-professional groups, in particular those who already had access to a pension system, chose to conserve their own system rather than join in a single scheme with uniform rights for all. As a result, France currently has about 40 different basic schemes, of which the main ones are as follows:

- the pension scheme for civil servants: a product of the pensions system, this scheme covers state employees and is financed directly by the state budget,

- the scheme for local government employees (CNRACL),
- the scheme for public-sector employees other than civil servants (IRCANTEC),
- the agricultural scheme: managed by the Mutualité sociale agricole (MSA), this covers both salaried agricultural workers and farmers and is financed partly by the state budget,
- the scheme for the self-employed (artisans, tradespeople and independent professional people), the different funds of which were merged in 2006 to form the Régime social des indépendants (RSI),
- the special schemes: these cover a wide range of schemes for specific professions (miners, seamen, notary clerks, dancers of the Opéra de Paris, etc.) or the major national companies (SNCF, RATP, EDF, GDF, etc.).

Generally the civil servants’ schemes and special schemes offer more favourable terms (in terms of contribution periods, retirement age, method of pension calculation, etc.) than the general scheme.

To compensate for wide disparities between schemes (the miners’ scheme has practically no more contributors for example), the state has introduced a "demographic compensation" mechanism whereby the schemes with a more favourable demographic ratio (i.e. a higher number of contributors compared to the number of retirees) transfer funds to those schemes with an unfavourable ratio.

The statutory schemes

All individuals covered by a basic scheme must also contribute to a complementary retirement scheme. Depending on the case, such schemes are run either by the fund that manages the basic scheme or by a special complementary fund. Like the basic schemes, they are financed by earnings-related contributions.
In the case of salaried employees, the complementary schemes are managed by various professional funds under the umbrella of ARCCO for non-management staff (non-cadres) and AGIRC for executives and managers (cadres).

The optional schemes

Private-sector employees increasingly have the possibility of contributing to an optional retirement plan. These schemes are offered at the initiative of the employer who usually makes a matching contribution. Similar systems are available for civil servants.

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Family Benefits

The National Family Fund (CNAF) and local family funds (CAF) are the main players in the area of family welfare, providing benefits for couples, families with children and single parents. Unlike the other branches of the social security system, the family branch is financed solely by employers’ contributions.

These benefits are designed to offset the costs due to the arrival of a child, and to help pay for the cost of childcare (nurseries or childminders). The main benefit in this area is the infant accommodation benefit (PAJE, prestation d’accueil du jeune enfant) introduced in 2004, and which replaces other previous benefits.

Under the scheme, parents receive a payment during the seventh month of pregnancy and once their child is born, contingent on mandatory medical checkups for the pregnant mother an infant. If either parent stops work to look after the child, he or she may also claim a monthly allowance determined according to the number of children in the family. If both parents choose to work and to use a registered childminder or a childminder in their own home, the PAJE covers all or part of the employers’ social security contributions payable by the parents.

Family allowance

The continuation of a long line of pro-birth benefits - and accordingly exempted from means testing – the family allowance benefit (allocations familiales) is designed to offset some of the cost of bringing up children for families with two or more children aged under 20. The size of the allowance depends on the number and the age of the children.

The various other family benefits available are generally means-tested. They include:

- the family income supplement (complément familial), which tops up family allowance for families with three or more children aged three or above,

- the new school-year allowance (allocation de rentrée scolaire),

- the per diem parental presence allowance (allocation journalière de présence parentale) for parents who stay at home to look after a seriously ill, disabled or injured child.

Lone parent families also have access to specific allowances such as the single parent’s allowance (allocation de parent isolé) and a family support allowance (aide de soutien familial). The local family funds (CAF) also help custodial parents to collect child support payments.

Families with a disabled child can claim a disabled child’s education allowance (AEEH, allocation d'éducation de l'enfant handicapé,), while disabled adults may qualify for a disabled adult’s allowance (AAH, allocation aux adultes handicapés) funded by the state.

The local family funds also provide several types of housing benefit. These are targeted primarily at people renting their homes and first-time home buyers. The amount of the benefit varies according to the characteristics of the property, the number of children and family income. The main benefits are the housing allowance (allocation de logement) and the individual housing benefit (aide personnalisée au logement).

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Unemployment Benefits

The current unemployment benefits system was created in 1958. It is both a social protection system to offset the risk of joblessness and a system to help job seekers back into work. A statutory scheme funded by earnings-related contributions from employers and employees, it covers all private sector employees and some public sector contract workers. In April 2006, the number of benefit recipients was 2.37 million, 75% of whom are covered by the unemployment insurance system and the remaining 25% by the state-financed “solidarity scheme” (for unemployed workers not entitled to unemployment benefit or whose entitlement to unemployment benefit has come to an end).

To qualify for unemployment benefit, a person must be aged under 60 or 65 and must not yet be eligible for the payment of their retirement pension. They must also have worked for a period of at least six months, must not have ceased their last job voluntarily and must be capable of work. Benefits may exceptionally be granted in certain cases of voluntary departure. Claimants must be registered with the National Employment Agency (ANPE) and be actively seeking work or following a training course. The duration of benefits depends on age and duration of the last job held. The level of benefit must not exceed 75% of a daily reference wage based on former salaries, and diminishes progressively.

The agreement of 1st January 2001 on support for job seekers and unemployment insurance introduced the Return to Employment Aid Plan (PARE, Plan d'aide au retour à l'emploi). Any job seeker can commit to a PARE. ANPE agencies also provide job seekers with individual assistance in seeking employment.

This comprises two benefits: the special solidarity benefit (ASS, allocation de solidarité spécifique) and the integration allowance (AI, allocation d'insertion). The former is payable to unemployed workers who have exhausted their rights to benefits and have worked for at least five of the ten previous years. Benefits are granted for an initial period of six months, which may be extended by additional six month periods. The AI is granted to specific categories of unemployed workers, such as former prisoners and asylum seekers. It is also awarded for renewable six month periods.

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Social and Solidarity Programmes

Generally administered by the départements, these social programmes target children and families in difficulty, the elderly, and people with disabilities. They take the form of specific benefits and programmes:

The personal autonomy allowance (APA, allocation personnalisée d’autonomie) concerns people aged 60 and over, living at home or in an institution and suffering a loss of autonomy, the degree of which is assessed on a special national scale (AGGIR). The amount of the APA depends on the degree of dependence and income. The allowance is used to finance a personal care plan adapted to the individual’s personal situation and needs.

Since the Disability Act of 11 February 2005 (loi Handicap), the main benefit for people with disabilities is the compensatory disability benefit (PCH, prestation de compensation du handicap,) which operates on similar lines as the APA for the elderly.

Protection for children and adolescents is provided through the child welfare service (ASE, aide sociale à l'enfance), set up to identify children at risk of abuse and provide material and/or educational support to families and children in need of help. Where necessary, the service also ensures placement of children in institutions or foster homes at the initiative of a children’s judge or the local authorities (département).

Created in 1988 and initially financed by the state, the RMI (Revenu minimum d’insertion) was transferred to the départements in 2004. It is payable to persons aged over 25 legally residing in France, and covers the difference between their own income and a guaranteed minimum income. The allowance is accompanied by a contract signed by the beneficiary and the département, providing for measures to promote the recipient’s social integration. Recipients have automatic entitlement to the CMU (health insurance under the universal medical coverage programme).
In 2004, the RMI was completed by a “minimum activity revenue” (RMA, revenu minimum d'activité), a part-time employment contract of at least 20 hours per week for a six month period. It is renewable twice within an 18 month limit.

In addition to the above benefits, the different social security organisations offer a wide range of assistance and social programmes for beneficiaries (monetary assistance, coverage of extra expenses, etc.). Many of the programmes are provided by the family branch of the social security system, including subsidies for the creation of nurseries and recreational facilities for children and adolescents.


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