Changes in the French social protection system Towards a Welfare security ? Michel Messu Nantes University and GEPECS Paris- Descartes (France)

2 The French social protection system: structure Social insurance Statutory Contribution-based Covers risks Compensates for a loss Eligibility controls Social welfare Linked to residency Non-contributive Relief for survival Limited amounts Controls of eligibility and use of benefits

3 Institutional building and consolidation in 1945 Social insurance Social insurance fund Health insurance fund (CNAMTS) Occupational health and safety and employment injury (CNAMTS) Old age fund (CNAVTS) Family benefits fund (CNAF) Social welfare Social welfare services State-centralised (medical aid, child protection, etc.) Local relief by town authorities and local administration + private charities

4 Towards universalisation of compulsory social insurance: some landmarks 1945Wage-workers in industry and trade 1947 Civil servants - Pensions for private sector executives and managers 1948Pensions for self-employed workers outside agriculture (professionals, crasftsmen, shopkeepers, retailers, etc.) 1952Pensions for farmers 1961Health insurance for farmers 1966Health insurance for self-employed workers outside agriculture 1975Universalisation of old-age insurance legal coverage to the labour force 1990Establishment of a social security income tax (CSG) 1999Universalisation of health insurance legal coverage (partly tax- based for non contributors)

5 Changes in social welfare services and schemes Since the 1970’s and 1980’s, assistance and relief benefits distributed to the poor, the disabled, widows, etc. tend to be turned into minimum income benefits. The minimum income benefits represent a hybridisation between social insurance and social welfare. They target 8 different categories of situations. They are financed by the general budget. One of the most significant minimum income benefits was established in In the midst of a dramatic rise of unemployment, the State created a minimum income aimed at social and employment integration (RMI). It is served to unemployed and non active persons above 25 years old.

6 Welfare security or towards a fiscal-based welfare insurance Universalisation is reached through a combination of contributive social insurance and fiscal-based minimum income benefits. For example, universal health insurance provides the same protection to « the non-working poor » and contributing workers. The new schemes provide an income guarantee on a relatively long-term basis. A growing hybridisation of protection schemes addressing groups and individuals that had previously been separated according to their employment and labour force status.

7 Overcoming the threshold effect and the employment status dividing line: an example with the RSA Since 2009, the Active solidarity income (RSA) replaces the RMI: It provides benefits to poor unemployed persons, to poor non-labour force members but also to working poor. It allows the beneficiaries to combine welfare benefits and labour income. It smoothens the threshold effect of the previous minimum income RMI when an unemployed person finds a low income job. It is coupled with active labour market integration measures and controls It is funded by the general budget However: It only covers a small share of the under 25 years old, at very restrictive conditions It does not redress the tilt of labour integration and training schemes It institutionalises the fact that labour income is not the sole source of revenue for workers (issue of minimum wage, of workers on welfare, etc.) It is mainly funded through middle-class solidarity (income tax structure)

8 Towards universalisation of effective social rights ? A general trend to criticise and overcome: Pernicious effects of targeted and conditional assistance benefits Administrative costs of entry into the schemes and of various controls (eligibility, behaviour and benefit uses) Persistent non take-up Stigmatisation and social fragmentation But universalisation remains hindered by : Restrictive conditions and multiple requirements to enter minimum income schemes Only concerns certain social groups according to age, residency, legal status, family income

9 Some pending political and technical issues Which social units are the schemes addressing? The family, or household? The individual? What is the status of the beneficiary ? A citizen ? A poor, a disabled, a child, a mother, an old person ? Which type of right ? Conditional vs. unconditional ? Compensatory vs. preventive? Which provider ? Public administration, firms and market, civil society organisations? Which funding sources and combination ? Equality, equity or fragmented and unequal universalisation ? It does not solve the problem of real poverty because the benefits are too low.

10 Conclusion The major transformations of the French social protection system : Tend to hybridise and to blur the insurance / assistance - welfare divide Provide basic income benefits that protect human dignity Maintain restrictive entry and eligibility conditions Tend to reinforce behavioural controls and checks on benefit uses.

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