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France

New French unemployment benefit law comes into effect

Video by FRANCE 3 , FRANCE 2

Text by FRANCE 24

Latest update : 2009-06-01

Twenty years after its creation, France's RMI unemployment benefits program is being replaced by the RSA, which will cover an additional 1.8 million people and bring the "working poor" in its fold.

More than 20 years after its creation, France's RMI unemployment benefit ("revenu minimum d'insertion", or "minimum insertion revenue") has been formally replaced by the RSA, or "revenu de solidarité active" ("revenue of active solidarity").

Introduced by the high commissioner for workers' solidarity, Martin Hirsch, the RSA is expected to benefit 3 million people, compared to 1.2 million for its predecessor.

The new program's goal is to assist not only the unemployed but also the "working poor", including those who find a job but have a lower income than if they had continued on unemployment.

The standard RMI amount of 454 euros for an unmarried jobless individual won't change. But working individuals who earn less than 880 euros a month can receive additional help by applying to the national fund for family allowances (Caisse Nationale d'Allocations Familiales). They'll receive additional funds which are reduced as their wages increase.

Unlike the RMI, the RSA, which Hirsch says was designed as a "shield" for the poor and those with modest means, will allow an employed individual to combine income and government allowances for an indefinite period.

The government says that the RSA would allow 700,000 people to rise above the poverty line. But critics say that the measure could encourage businesses to employ workers on lower salaries than usual with the expectation that the RSA would make up the difference. This is especially relevant as the law was passed in November by the parliament but will be implemented during a time of economic crisis.

The RSA will cost the state about 1.5 billion euros more than the RMI, and the government plans to it fund with a new 1.1% tax on income.

Date created : 2009-06-01

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