France breaks political taboo by means testing family benefit

France’s cash-strapped government was attacked from left and right today over plans to cut family benefit payouts by tying them for the first time in over half a century to household income, breaking a political taboo.

Flat-rate cash payments based on the number of children in a household have since the end of the second World War been a key part of a public pro-family policy that many say explains why France has the highest birthrate in Europe alongside Ireland.

Social affairs minister Marisol Touraine announced yesterday family benefits would be cut in half for households that earn €6,000 taxable income or more per month, and by three quarters when monthly earnings top €8,000 .

The government, which this week said it would need a second two-year reprieve before it could honour EU pledges to trim the scale of deficit-spending, expects the benefit cuts to save €400 million in 2015 and €800 million a year after that.

Socialist president Francois Hollande is increasingly torn between demands from countries like Germany for more decisive steps to fix public finances and dissenters his own party who believe he is already inflicting too much austerity on voters.

One Socialist hardliner recently dropped from government as Hollande sought to reassert authority faulted the change of policy on family benefit. "This solution doesn't have my support," said Benoit Hamon, former education minister and one of a group of Socialist Party hardliners who have so far failed to muster enough momentum to alter policy but whose discontent may crimp Hollande's will to consider more aggressive cutbacks.

Other critics of the family benefit cuts included trade unions and right-wing politicians. "They're attacking family policy but only family policy," conservative lawmaker Eric Woerth said on RTL radio, raising the possibility of challenging the measure in constitutional court.

“It’s one of the rare policies that works well in France, we’ve got a high birth rate,” the former budget minister said. Hollande had promised to leave family benefits alone before his election in 2012.

The head of the left-wing CGT union, Thierry Lepaon, accused the reform of pitting the poor against the rich while far-right Front National leader Marine Le Pen said she would have preferred to see the government cut foreigners' access to such benefits rather than French citizens. "It's one of the reason people come to France, you can get a lot of money with three, four or five children."

Laurence Rossignol, a junior minister with responsibility for family affairs, said 88 per cent of recipients would see no change as a result of benefit cuts that only kicked in for high earners of €6,000 a month or more.

Reuters