Manuel Valls backs major reform of French welfare system

Prime minister Manuel Valls yesterday gave his support to a dramatic reform of France’s incomprehensible social welfare system, which would eventually transform 10 different types of welfare payments into a single “common base coverage” of €400 per month, with top-ups for some recipients.

The socialist member of the National Assembly, Christophe Sirugue, presented his report, titled Rethinking Social Minima – Towards a Common Base Coverage,to Mr Valls and a half-dozen government ministers.

Mr Valls praised the report as “pragmatic and ambitious”.

Mr Sirugue wants to extend social welfare payments to the young. At present, only 176,000 people between the ages of 18 and 24 are eligible for benefits, because they are parents, have worked full-time for two years, or have an older spouse who receives welfare.

“To deprive the great majority of this age category of inclusion in our struggle against poverty is no longer acceptable,” Mr Sirugue writes, regarding 18- to 24 year-olds. “This age criterion is very unusual compared to our neighbours and European partners, and prevents us from efficiently fighting poverty among the young, whose situation has deteriorated markedly since 2008.”

The cour des comptes, the state auditor, says 8.5 million people, or nearly 14 per cent of the population, live in poverty. That figure rises to 18.6 per cent among 18-29 year-olds.

“We must accept, on the left, to say that preventing a young person from starting out in precarious circumstances is not handouts but an investment,” Mr Sirugue said.

Youth vote

During his 2012 campaign, President François Hollande made improving the lives of French youth his top priority.

The Sirugue report was praised by the students’ union Unef. Some observers saw it as a bid for the youth vote one year before presidential and legislative elections.

The 10 different French welfare payments are the RSA, ASS, ATA, ADA, ASI, AAH, AV, RSO, PTS and ASPA. They cover various categories of the jobless, asylum seekers, people with a disability, elderly, widowed and residents of overseas territories.

“The social minima were created over time after the war, and accumulated without anyone ever trying to harmonise them,” Mr Sirugue said when he started his mission last December.a

“The 10 extant social minima are characterised by the complexity and diversity of rules applied to beneficiaries,” the parliamentarian concluded in his report. This complexity made the system so incomprehensible that many people do not apply for benefits they are entitled to, creating “bitterness and tension”, he wrote.

New measures

Mr Sirugue proposed three alternative ways of reforming the system. The first consists of 12 measures to “to simplify the architecture of social minima” by January 1st, 2017. Mr Valls said he would “carry out all proposals in the report which simplify and harmonise benefits very quickly, because complexity creates inequality”.

The prime minister will apparently skip the second proposal, which would regroup social welfare categories, reducing them from 10 to five. He has asked government ministers to do “in-depth work” on the third scenario, which would eventually merge all categories into one.

Under the present system, France will spent €28 billion on social welfare next year.

The reform will take place in two stages.

The first, simplification stage will cost some €150 million, Mr Sirugue said.

Transforming all benefits into a single “common base coverage” will cost €6.6 billion, require up to two years and would constitute “a choice of society”, he said.

Beneficiaries of the €400 monthly payment could receive a top-up of €100 monthly to encourage their “integration”, while the elderly or those with a disability could receive up to €407.65 in additional payments.

Mr Sirugue said he was inspired by the idea of an unconditional basic income, which is the subject of a European citizens’ initiative. But such a “heavy reform” would require “10 years of reflection”, he added.

Switzerland, where 8 per cent of the population live in poverty, will decide in June whether to pay an unconditional base income of €2,300 monthly to every inhabitant.

In November, Finland will begin distributing €800 a month to every Finnish person. Some 30 Dutch cities are also experimenting with unconditional base incomes. Canada was the first to test a “mincome” programme in the 1970s, but abandoned it for lack of money.