Social Security (Minimum Standards) Convention, 1952 (No. 102) - France (Ratification: 1974)

Replies received to the issues raised in a direct request which do not give rise to further comments (CEACR) - adopted 2023, published 112nd ILC session (2024)

The Committee notes the information provided by the Government, which answers the points raised in its previous direct request and has no further matters to raise in this regard.

Direct Request (CEACR) - adopted 2017, published 107th ILC session (2018)

Part II of the Convention (Medical care). The Government reports the establishment of universal health protection (PUM) on 1 January 2016, which guarantees all persons who work or reside in France the right to coverage of health expenditure (the reimbursement of health costs, but not cash benefits), without any specific administrative steps to be taken, with a view to simplifying the life of insured persons through the right to the continuous reimbursement of care, without changes in family or occupational situation affecting this right, and by reducing administrative procedures to those that are strictly necessary. The improvement in access to care takes the form, among others, of measures such as the improvement of the access of all persons to quality supplementary health coverage intended to reduce the share to be borne by the patient, an increase in assistance for supplementary health coverage for persons over the age of 60 and the generalization in 2017 of third-party payment, with a view to the payment of fees for care directly to health professionals. With reference to medium- and long-term prospects, the Committee also notes that the report on the future medium- and long-term financing of social protection schemes, published in January 2014 by the Higher Council for the Financing of Social Protection, refers, among major future issues, to the concentration of potential financing needs on health insurance schemes. In contrast, Act No. 2014-1554 of 22 December 2014 on social security financing for 2015 established a national objective for health insurance expenditure (ONDAM) of an average 2 per cent reduction for 2015–17, or savings of €10 billion over that period. The Committee requests the Government to clarify whether the current policy of containing expenditure is slowing down the achievement of the objectives referred to above of universal health protection, the improvement of access to care and the concentration of financing on health insurance schemes.

Part IV (Unemployment benefit). In its 2015 conclusions on the application of the European Code of Social Security, the Committee requested the Government to provide a copy of the report on the financial situation of unemployment insurance which the Government had submitted to Parliament and the social partners involved in the management of the National Inter-occupational Union for Employment in Industry and Commerce (UNEDIC), in accordance with the requirements of the Act on the planning of public finances for the years 2014–19, with an explanation of the main strategic priorities determined to contribute to achieving financial balance in the medium and long term. In 2016, the Government replied that the response to this request would be communicated directly by the General Delegation for Employment and Vocational Training (DGEFP). As no reply has been received, the Committee reiterates its request concerning the prospects for the sustained financing of the unemployment insurance scheme.

Part V (Old-age benefit). In reply to the request by the Committee to identify the reforms considered to have been the most effective, the Government refers in the 30th report on the European Code of Social Security to the introduction of the personal account for the prevention of arduous work, which recognizes certain occupations as being particularly difficult and requiring specific arrangements. This mechanism, which has been in force since 2015, is based on the determination of minimum annual thresholds of exposure associated with each of the ten risk factors measured within the enterprise; each employee exposed to at least one factor beyond the threshold determined, for whom the duration of the employment contract is equal to or above one month, must be declared by the employer. This declaration means that the employee benefits from an account and accumulates points for exposure to one or more risk factors over a specific period. The account for the prevention of arduous work is constituted throughout the career, up to a maximum of 100 points (non renewable), and serves to finance: vocational training to gain access to a job that is less or not exposed to factors of arduous work; hours that are not worked, that is part-time work while maintaining the same wage; the validation of quarterly contributions for the retirement insurance scheme (an increase in the duration of insurance), within the limit of eight quarters, as a result of which retirement can be advanced by two years in relation to the statutory age. Entitlement is accumulated throughout the career, irrespective of changes of employer and periods of non-employment. The points accumulated are acquired until they are used in full, retirement is taken or the beneficiary of the account dies. Consideration of the ten risk factors was introduced progressively: four risk factors entered into force in 2015 (night work, work in a hyperbaric environment (high pressure), work in successive alternating shifts, repetitive work); and the six others in 2016 (extreme temperatures, noise, hazardous chemicals (including dust and smoke), the manual handling of loads, arduous postures or positions in which joints are under pressure, mechanical vibration). By the end of 2015, a total of 26,480 enterprises, of which 87 per cent were small and medium-sized enterprises (SMEs), had made declarations resulting in the opening of 540,298 accounts for arduous work. Half of exposure is related to the “night work” factor. With the publication of six new criteria of exposure, 3 million employees may potentially be concerned by these accounts. In 2016, with the account format of ten criteria, some 797,000 persons were declared by their employers. The various branches are currently developing reference tools which will offer valuable assistance to enterprises for the establishment of the accounts, and particularly for very small enterprises (VSEs) and SMEs.

The Committee notes with interest that France is still one of the few European countries making further efforts to take into account more effectively the arduous nature of work, including by bringing forward the pensionable age in relation to the statutory retirement age. It observes that the approach developed by France allows the development of synergies between the right to occupational safety and health and the right to social security, as set out in ILO Conventions and Recommendations, which not only advocate lowering the pensionable age for workers exposed to arduous types of work, but also regulate the rate of exposure and preventive measures for most of the risks included in the occupational prevention account. The Committee hopes that France will be able to go further with this approach, which offers the potential to serve as a model of “good practice” for many other countries, with the promotional support of the ILO, if necessary. In this context, the Committee notes that the new Government, which took office at the end of May 2017, has announced a reform of the occupational prevention account. Four criteria (the handling of heavy loads, arduous postures, chemical hazards and mechanical vibration), considered difficult to measure, are due to be removed from the account and employees exposed to these risks will be examined by an occupational physician at the end of their career with a view to asserting their rights. The Committee hopes that the Government’s next report will contain further details on this reform, taking into account the international standards referred to above.

The Committee also notes that Act No. 2014-40 of 20 January 2014, which is intended to ensure the future and the justice of the retirement system in the short, medium and long term, provides for a series of measures to improve the entitlement to retirement benefits of women, and particularly those affected by low wages and part-time work; the improved consideration of the consequences of maternity on women’s careers; the reinforcement of solidarity mechanisms for insured persons with “bumpy” careers; and a progressive increase in the period of insurance required for full-rate pension benefits. The Committee requests the Government to provide details of all the solidarity and equity measures taken to improve the retirement pensions of women in the short, medium and long term.

Part XI (Standards to be complied with by periodical payments), Articles 65 and 66. Determination of the reference wage. In 2014, in its conclusions on the European Code of Social Security, the Committee requested the Government to revise the method for the determination of the reference wage in accordance with Articles 65 and 66 of the Convention by selecting the skilled manual male employee and the ordinary adult male labourer in the branch of economic activity employing the largest number of male protected persons at all skill levels, which in France is the manufacturing industry, and not construction. In 2015, the Government indicated that the authorities had noted the need to update the technique for the determination of the reference wage and would provide all the necessary data in 2016 on the occasion of the next detailed report. In its 2016 report, the Government identified the most representative skilled manual male employee as working in the “wholesale and retail trade, transport, accommodation and catering” sector in relation to Parts V and VI of the Convention, and in construction for Part IX. In contrast, the ordinary adult male labourer was selected in manufacturing. Finally, in 2017, the 30th annual report on the European Code determines the reference wage of a skilled manual male employee selected in “wholesale and retail trade, transport, accommodation and catering” and an unskilled manual male employee selected in “manufacturing, extractive and other industries”. The Committee recalls in this respect that in France the largest number of male employees is in the manufacturing industry (please refer in this regard to the ILO technical note) and requests the Government to determine the reference wage of a skilled manual male employee under Article 65 of the Convention in relation to the appropriate occupational categories in this industry.

Social minimum benefits. In previous reports, the Government indicated that social minimum benefits (minima sociaux) are a complex series of concepts which reflect the implementation of successive and diverse conceptions of their role. At present, social minimum benefits play a major role as a social shock absorber intended to attenuate the intensity of poverty by significantly raising the living standards of the poor towards the poverty threshold. With a view to addressing the effects of the crisis on families in the greatest difficulty, several significant adjustments of social minimum benefits have been made with the result that, following several years of decreases, the purchasing power of the active solidarity income rose in 2013 and 2014. As of 31 December 2013, 4 million persons benefited from one of the nine social minimum benefits which make it possible to ensure a minimum income for a person and his or her family. By including spouses, children and other dependants, 10.9 per cent of the French population, or 7.1 million persons, were covered by these measures, of which the four most important in numerical terms (96 per cent of beneficiaries) are the active solidarity income (RSA) floor, the allowance for adults with disabilities (AAH), the minimum old-age benefit and the specific solidarity allowance (ASS). The Committee requests the Government to update its data by indicating the role played in the national social security floor of minimum guaranteed benefits, the method used to determine their level and their role in combating poverty and social exclusion.

Direct Request (CEACR) - adopted 2011, published 101st ILC session (2012)

With reference to its previous comments, the Committee notes the information provided by the Government in its report on the Convention, as well as in the annual reports of France on the application of the European Code of Social Security for the years 2009–11.

Social security governance and financing. The Committee would like the Government to continue to provide information in its next annual report on the new measures of substance concerning social security financing, the implementation of the pension reform introduced by the Law No. 2010-1330 of 9 November 2010, and on the eventual social austerity measures taken in the context of the new degradation of the economic and financial situation in the country.

Direct Request (CEACR) - adopted 2008, published 98th ILC session (2009)

The Committee notes the information provided by the Government in reply to its previous direct request, and the information contained in the 21st annual report on the application of the European Code of Social Security.

Part II of the Convention (Medical care). Improvement of the financial situation of the branch. In the Committee’s previous direct request, the Government was invited to give an account of its new policy in the field of health insurance, specifying the measures taken to reduce the deficit of the branch, ensure that the system is sustainable in the long term and effective access to high-quality services for all. The Government indicates in its reply that Act No. 2007-1786 on social security financing for 2008 of 19 December 2007 introduces deductibles from the reimbursement of certain products and healthcare for basic health insurance schemes, known as medical “franchises”, i.e. annual spending thresholds on consultations, treatments and hospital visits below which patients must pay for their own treatment. These new deductibles, which are in addition to existing cost-sharing and flat-rate reimbursement, apply to all persons, except for children, pregnant women and persons with low means. Their amount is a flat rate (0.50 euros for each box of medicine and each para-medical act, and 2 euros for health-related transport) and they are applicable up to an annual ceiling of 50 euros per person. The new sources of financing introduced by the Act also include a contribution by employers (10 per cent) and employees (2.5 per cent) on awards of stock options allocated to the financing of the health insurance scheme, the extension into 2008 of the exceptional rate for contributions by pharmaceutical enterprises based on their turnover and the extension of the Social Solidarity Contribution to public law associations operating in a competitive context. The Government also reports a bill for the establishment of regional health agencies which will gather together the services of the State and certain health insurance personnel for the unified management of the outpatient, hospital and socio-medical sectors. The Committee hopes that the Government will be in a position to provide further particulars in its next report on the tangible results of these measures in terms of the financial recovery and unified management of the system.

Part V (Old-age benefit). Level of benefits. In reply to the Committee’s request, the report contains the calculation of the replacement rate of the old-age pension for a standard beneficiary of 65 years of age with 120 quarters (30 years) of contributions in 2004, without children and with a spouse of pensionable age having no individual entitlements. The percentage of the amount of the pension in relation to the average wage determined in accordance with Article 65 of the Convention is 39.50 per cent for a pension paid in 2004, which is below the 40 per cent prescribed by the Convention. The same calculation for the pension paid in 2008 would lower this to 37.50 per cent. The Government, however, explains that these are very simplified methods of calculation and are confined to the basic retirement scheme. It therefore provides a more elaborate calculation which takes into account both wage and contribution fluctuations over the years of work taken into consideration and the two elements which constitute the compulsory retirement benefit for employed persons in France; the basic scheme and, for non- managerial employed persons, the supplementary-ARRCO pay-as-you-go scheme. The calculation is made for a standard beneficiary who has completed 120 quarters of insurance and employment at the minimum wage (SMIG) in 2008. The replacement rate of the gross pension in relation to the last gross wage (1,267 euros in 2008) is 56 per cent and therefore exceeds the minimum rate required by the Convention.

The Committee notes that, in selecting the method of calculation of the replacement rate envisaged in Article 28(a) of the Convention, the Government indicates that the old-age pension continues to be covered by Article 65 of the Convention and consequently takes as the reference wage for its calculation of the gross monthly wage of a skilled manual male employee in the metal and metallurgy sector (2,000 euros in 2004). However, where this calculation gives a replacement rate that is lower than the 40 per cent determined by the Convention, the Government undertakes a more elaborate calculation in which the wage of the skilled manual employee is replaced by the minimum wage (SMIG). The Committee is bound to point out that the SMIG cannot be used as a reference wage under the terms of Article 65 of the Convention. If, however, the Government intends to make use of the method of calculation envisaged in Article 66 of the Convention, it has to demonstrate that the SMIG is equal to the wage of an ordinary adult male labourer and the amount of the minimum old-age pension provided to persons protected in France is in no event lower than 40 per cent of the SMIG. Finally, to be able to take into account the supplementary ARRCO pay-as-you-go scheme, it is necessary to demonstrate that this scheme covers at least 50 per cent of all employees, in accordance with Article 27(a) of the Convention. The Committee hopes that these indications will help the Government to provide in its next report the updated calculation of the old-age pension so as to demonstrate that the replacement rate envisaged by the Convention is still achieved.

Control and inspection in relation to social security. In reply to the Committee’s request, the Government’s report contains detailed explanations of French policy to control and combat social fraud, in the context of which action is envisaged in relation to all of the actors in the social security system. With regard to enterprises and employers, the priority actions introduced include the monitoring of the secondment employees, of mechanisms for the evasion of social contributions, of exemption measures, the reduction and re-evaluation of income subject to contributions, and in particular measures to combat hidden employment. Insured persons are subject to greater controls in relation to the conditions for the granting of benefits (income from work and personal means, household resources, dependant persons and children, stable and lawful residence, etc.), while health professionals are controlled in relation to the conditions for the application of rules respecting fees for medical acts and procedures for the prescription of medicines. All of these measures are intended to establish in each branch of social security a real culture of supervision based on a renewed legal framework covering:

–      the strengthening of the powers of controllers of social security institutions to improve the conditions under which they monitor financial records and personal means through the procedure for assessing elements of living standards and benefits provided outside France;

–      the development of procedures for the exchange of data and information among social institutions and between these institutions and the fiscal and judicial authorities;

–      the achievement of greater awareness by enterprises to dissuade them from committing fraud or abuse in relation to their social security declarations and the payment of contributions (particularly through the application of a flat-rate penalty procedure equivalent to six times the amount of the minimum wage for employers who conceal or reduce the contributions to be paid and through a procedure against those who challenge the obligation of affiliation to the social security system);

–      the improvement of awareness of their responsibilities among beneficiaries and health professionals and providers through the effective application of penalties in cases of proven fraud, as envisaged in the Social Security Code.

Decree No. 2008-371 of 18 April 2008 creates new structures entrusted with coordinating policy to combat both social security and fiscal fraud. Accordingly, the National Committee to Combat Fraud, the political body which gathers together the ministers concerned, defines the objectives of the policy to combat fraud. The National Delegation to Combat Fraud, an administrative body, coordinates the action taken between the competent state services, on the one hand, and between these services and social security institutions, on the other. It contributes to the effective collection of public income from contributions and the payment of social benefits, and the prevention of any fraud or abuse by beneficiaries. It guides the work of the operational committees to combat illegal work and of the local committees which coordinate all joint action at the local level undertaken by the administrative services responsible for combating fraud. At the level of social security institutions, a coherent and identifiable administrative network has been established with the creation of a fraud department for each branch of social security and the appointment of local focal points to share good practices and knowledge.

The Committee observes that the new French policy to control and combat social security fraud lies within a general trend that has emerged over recent years in several European countries consisting, on the one hand, of equipping social security systems with their own inspection and enforcement mechanisms and, on the other, of ensuring close collaboration between these mechanisms and other public services entrusted with supervision and enforcement, such as the fiscal services, the labour inspectorate, services to control the residence of foreign nationals and migration, etc. The legal, administrative and operational means deployed in France for the implementation of this policy are unparalleled in Europe. The extent and systematic nature of the measures adopted allow the coverage of all the persons concerned throughout the national territory, at all administrative levels and in all branches of social security. The Committee sees them as new elements in the French response to the increasingly complex problem of the management of a social security system that is replete with many “niches sociales”, social exemptions and reductions, and other subsidies, privileges and inequalities. It shares the Government’s opinion that, while fraud is committed by only a minority of actors and beneficiaries and its suppression will not in itself resolve the imbalance of social security finances, it is nevertheless a reality that must not be denied, as it has a real financial impact. In view of the concern to resolve the imbalance in social security financing, in accordance with Article 71, paragraph 3, of the Convention, the Committee would be grateful if the Government would specify in its next report whether estimates and actuarial calculations have been made of the financial impact of fraud on the social security system and if it would compare them to the cost of operating the new structures responsible for combating fraud. Please also indicate the proportion of these costs that are borne by the general social security scheme in relation to the potential financial benefit that may accrue to it as a result of the measures for the collection of contributions carried out by these structures. With a view to preventing significant resources being withdrawn from the social security system to cover public policies pursuing other objectives, the Committee invites the Government to provide a transparent picture of the additional administrative costs arising out of its policy to combat social security fraud for the general social security scheme and to specify the role that the representatives of the persons protected, and particularly trade unions, will be called upon to play in the implementation of this policy, in accordance with Article 71, paragraph 1, of the Convention.

Observation (CEACR) - adopted 2008, published 98th ILC session (2009)

The Committee notes the information provided by the Government in reply to its previous direct request, and the information contained in the 21st annual report on the application of the European Code of Social Security.

Governance and financing of social security in periods of crisis. According to the Government, the social security deficit has continued to decrease. The improvement of the financial situation of the social security system remains a priority, which has set as its objective a return to financial equilibrium for the general scheme by 2011. Its strategy is based on new measures to contain costs, more secure resources and greater control over exemptions and “niches sociales”, the continued clarification of the financial relations between the State and the social security system and the reimbursement of earlier social security deficits by 2021. The Bill on finance and the financing of social security, which will be submitted to Parliament in the autumn of 2008, will include measures in that respect. In the meantime, several additional measures have been adopted in the context of the Act on social security financing for 2008, which introduced new sources of revenue, adapted various measures relating to exemptions from social contributions and abolished all measures granting total exemptions from contributions in relation to employment injury insurance.

The Committee trusts that the measures adopted or envisaged by the Government will be commensurate with both the gravity of the financial situation of the general social security scheme and the general responsibility of the State to ensure the viability and sustainable development of the system. It considers that the return to the annual equilibrium of social financing must constitute a priority for the public authorities. It nevertheless understands that the task of improving the financial situation of the social security system that is incumbent upon the Government is liable to become a greater burden in view of the current crisis in the global financial system, which may endanger social security funds. The Committee notes with concern that, according to the indications provided to the press in October 2008 by the directors of the Pension Reserve Fund in France, since the beginning of the year the Fund’s global assets have lost 11 per cent of their value, or 3.8 billion euros. In the current situation, the Committee believes it important to emphasize that, while it is true that the provisions of the Convention are not designed for the management of social security in a crisis situation, they nevertheless establish parameters compliance with which is intended to ensure the stability and sound governance of the system. A sound management policy in periods of crisis would therefore consist of bearing these parameters in mind to allow the progressive return of the system to its normal condition, even though emergency measures may temporarily introduce significant corrections into these parameters. The role of the Convention therefore takes on particular importance with a view to ensuring the concerted recovery for ratifying countries from the crisis by obliging them all to bring their social security systems back to the initial parameters.

The Committee also wishes to emphasize in this respect that during periods of crisis no member State can discharge its general responsibility under Article 71, paragraph 3, of the Convention for the maintenance of financial equilibrium and to safeguard the viability of the social security system without, at the same time, being committed to the obligation to achieve time-bound results. It is with the aim of achieving the desired result within the determined time limits that this provision of the Convention places each member State under the obligation to “take all measures required”, including emergency measures dictated by the crisis.

The Committee notes in this context that at the operational level, through the introduction since 1996 of the management of the social security system in the context of the annual Act on the Financing of Social Security, the French Government has progressively adopted one of the most significant arsenals of financial instruments and regulations in Europe. The experience acquired by the Government in the “tight” financial management of social security affords it comparative advantages to ensure wise governance in these perilous times for both the financial system and the social security system, by maintaining the latter within the parameters envisaged by the Convention. The Committee trusts that, despite the financial crisis, the Government will be in a position to specify in its next report, with reference to the relevant texts, the time-bound commitments and revised schedules that it has determined or intends to determine for:

(i)    re-establishing the financial equilibrium of the social security system;

(ii)   stopping the continued growth of the public debt in relation to social security.

(iii) paying off former debts contracted by the State;

(iv)  envisaging sufficient budgetary allocations to cover the State’s future commitments to social security, particularly in relation to the compensation of exemptions or benefits provided on behalf of the State; and

(v)   introducing governance rules to clarify the financial relations between the social security system and the State and to prevent debts from being renewed in the future.

The Committee in raising other matters in a request addressed directly to the Government.

[The Government is asked to reply in detail to the present comments in 2009.]

 

Direct Request (CEACR) - adopted 2007, published 97th ILC session (2008)

With reference to its previous direct request, the Committee notes the detailed report on the application of the Convention, and the nineteenth and twentieth annual reports on the application by France of the European Code Social Security.

Social security management and financing. According to the nineteenth report of the Government, which covers the period ending on 30 June 2006, there have been far-reaching changes over the past 15 years in the way the financing of the General Social Security Scheme is structured. Besides the phasing out of ceilings on the contribution base, the resources of the General Scheme have been extended to include levies on certain behaviours that are costly to the scheme (certain types of alcohol and tobacco, automobile insurance premiums) and other levies (on interest from assets and investments, which go to the family and old-age branches) intended to strengthen financial solidarity between the members of the scheme. Contributions have been introduced on the turnover of the pharmaceutical industry and the wholesale marketing of pharmaceutical products, on company profits and on polluting activities. A new funding instrument with the legal status of a tax – the General Social Contribution – has been introduced gradually since 1991. In 1996 the Social Debt Redemption Fund (CADES) was created for the purpose of clearing, by 2014, both the interest and the principal of the debt run up by the General Scheme. The resources of CADES mostly come from the CRDS – a fiscal levy to repay social security debt – the base for which extends to most incomes other than minima sociaux (means-tested benefits). The Social Security Audit Board analyses the accounts of the social security schemes every year and submits reports to Parliament. Since 1996, the draft annual social security financing law has been accompanied by a report setting out the main lines of health and social security policy and the objectives that will determine the general conditions for financial balance in social security. The overall management of public social security policy has been improved by the Organic Act of 2 August 2005, which enhances truth and fairness in the financial balancing of social security and introduces multi-annual budgeting for income estimates and spending targets.

The Government’s twentieth report, which covers the period ending on 30 June 2007, focuses on the reduction of the social security deficit. Act No. 2006-1640 of 21 December 2006 on social security financing for 2007 provides for fewer new receipts (for the most part adjustments in pharmaceutical industry contributions) but has enabled several new measures to be taken thanks to the establishment in October 2006 of a National Committee to Combat Social Protection Fraud: penalties for incitement to refusal to comply with the prescriptions of the social security legislation, restitution of the carte Vitale (access to care) in the event of transfer of residence abroad, clarification of the status of workers seconded to France vis-à-vis the French social protection system, the introduction of standard-of-living components in means tests and a new national identification directory of insured persons.

(a) The Committee takes note of this information, which shows that greater attention has been paid in the last decade to the financing and sound management of social security in France. It notes that a worsening of the scheme’s finances led the Government to adopt a range of measures: broadening the contribution base and phasing out ceilings, introducing new taxes and contributions, establishing a special mechanism to repay the social debt, shifting the basis for management of the scheme to annual social security financing laws enacted by Parliament, setting up the National Committee to Combat Social Protection Fraud. The Committee notes with interest that, as a result, the social security deficit declined significantly in 2006. It notes, however, that in its report La sécurité sociale, September 2007, the Court of Auditors again draws attention to the extent of the social security’s indebtedness and the size of the deficit, and considers that the remedial measures currently applied by the Government are not commensurate with the gravity of the situation. Although between 2004 and 2006 CADES took over 50 billion euros (€) worth of deficits from the sickness branch of the General Scheme, the total deficits in other branches, financing funds and those foreseen for the coming years in the annex to the 2007 Social Security Financing Act are set to exceed €40 billion by 2009. Besides the deficits, the social security schemes are encumbered by receivables from the State, which are increasing. With the introduction of accrual accounting for the State, it has been possible for the first time to draw up an exact list of the State’s debts and loans with the social institutions. At 31 December 2006, the debts entered under this heading in the State’s balance sheet amounted to €9.13 billion, i.e. an increase of nearly €1 billion in the course of the 2006 financial year. The Court of Auditors considers that, having acknowledged these debts in its 2006 accounts, the State has a duty to clear them as soon as possible. Furthermore, to avoid running up new debts, it is important that the State should make sufficient budgetary provision to meet its commitments to prevent them mounting up year after year. The Court of Auditors further believes that a return to an annual balance in the social accounts must be the public authorities’ priority.

In their joint response (appended to the Court’s report) to the Court of Auditors, the Minister of Labour, Social Relations and Solidarity, the Minister of Health, Youth and Sport and the Minister of the Budget, Public Accounts and the Public Service, fully endorse the demand for clarification of the financial relations between the social security and the State. With the certification of accounts, conducted for the first time this year, both for the State and for the social security, it has been possible to record the mutual debts exhaustively, and the Government has decided to act on this by proceeding as from this year to clear the debt contracted by the State up to the end of 2006 and introducing rules of governance for the future to prevent any recurrence of debt. In particular, it will ensure sound programming of budgetary allocations to the social security for the offsetting of exemptions or benefits paid on the State’s account. The Government is thus following up on the Court’s recommendations.

The Court of Auditors’ work shows that the deficits of the social security schemes and its financing funds in France remain very high, which means further carry-over to future generations of a significant part of the cost of social protection. The persistence of this situation runs counter to the logic of sustainable development for social security, which is what underpins the Convention. In the Committee’s view, a continually mounting public debt sits ill with the principles of good governance of social security established by the Convention which the State has a duty to apply and which confer on it a general responsibility for the management of risks, the provision of benefits and the maintenance of the system’s financial balance. On the contrary, these principles require the State to clear former social security debts as soon as possible and make sufficient budgetary provisions for future commitments. The Committee notes that the French Government is determined to clear the debt contracted by the State up to the end of 2006 and to introduce rules of governance to prevent any recurrence of debt in the future. It would be grateful if in its next report the Government would describe all the measures taken to restore the system’s financial balance. The Committee would also point out that although measures to intensify the control of social security fraud appear necessary and logical at a time of heavy deficits in the schemes, any measure that has the effect of denying or suspending the benefits guaranteed by the Convention for the persons protected must be applied within the limits prescribed by Article 69 and in observance of the principles of proportionality and equal treatment for non-nationals. The Committee accordingly asks the Government to indicate the laws and regulations on which the National Committee to Combat Social Security Fraud will base punitive measures.

(b) The Court of Auditors has also examined the loss in contributions to the General Scheme following the multiple exemptions, allowances, deductions and reductions in the contribution base that help to finance it. Sizeable resources are thus lost to social security to the benefit of a wide range of public policies. In fact, the largest state debts stem from exemptions from social security contributions (€4.5 billion). In the view of the Court, there are now so many exemptions from the general rule that all income earned in exchange for, or in the context, of labour is taxable, that they ought to be reviewed to ascertain what purpose they serve and how effective they are. The Court points out that the information available on the scope of the various allowance arrangements is far from complete, does not give an up to date (or even approximate) cost/benefit analysis of the various arrangements and allows no accurate assessment of the potential effects in the event of any change. The Court considers that, in a context of large public deficits, such periodic reviews are the right approach and that the general aim should be the reduction of such arrangements.

According to the Court, the exemptions from social contributions are concentrated mainly in small enterprises (59 per cent of the exemptions on low wages benefit enterprises with fewer than 50 employees, representing a cost of €9.5 billion in 2005); while measures for profit sharing, participation, company pensions, stock options and free shares, de facto or de jure, benefit only enterprises with more than 200 employees and account for just over €10 billion in loss of revenue. Although there is little difference in these figures in terms of loss of revenue, the various arrangements generate marked distortions between the categories of enterprise benefiting from the exemptions and between the employees benefiting from the exempted income. The scale of the distortion warrants study of a reform of the employers’ share of social contributions with a view to broadening the contribution base, inter alia, by eliminating or capping the exemptions from social contributions applied to the value added of the acquisition of stock options, the special flat-rate deductions granted to certain occupations and the advantages linked to retirement and termination. Such a reform would have the advantage of being neutral in terms of forms of remuneration and size of enterprise. The Government’s twentieth report on the Code shows clearly the growing tendency to promote enterprise (large and small) development at the expense of social security. The 2007 Social Security Financing Act establishes several new measures for small enterprises (adjustment of the contribution base for freelance occupations, extension of the ACCRE system (assistance for unemployed persons who start up or take over an enterprise) to enterprises in “sensitive urban areas”) and a change in the social status of compensation for voluntary retirement in the context of forward management of jobs and skills in large enterprises. Act No. 2006-1666 of 21 December 2006 on financing for 2007 improves the overall relief on employers’ social security contributions in very small enterprises (one to 19 employees) and provides for a partial exemption for enterprises in the research and development zones of “competitiveness clusters” as from 1 July 2007. Act No. 2007-290 of 5 March 2007 establishing a binding entitlement to housing and various measures to further social cohesion introduces several provisions of similar scope on social contributions that apply to freelance workers covered by the micro-enterprise tax regime. Lastly, Act No. 2006-1771 of 30 December 2006 on amended finances for 2006 also introduces a temporary arrangement granting employers tax relief and social security exemptions in employment areas earmarked for revitalization.

On the basis of the foregoing information, the Committee observes that numerous arrangements for exemption, reductions or adjustments of the contribution base have been superimposed, resulting in a lowering of the product of the social security schemes to the benefit of a variable number of beneficiaries, whether workers or employers. Furthermore, the number and variety of these arrangements, the exact scale and impact of which are not known, not only add to the complexity and financial instability of the system but impose constraints on its management, undermining the latter’s efficiency. The Committee notes from the Ministers’ joint response to the Court of Auditors that the Government is still intent upon ensuring sustainable resources for social security and subscribes to the Court’s idea of regularly reviewing the relevance of certain exceptions to the rule that social security contributions are payable on the various advantages in cash and in kind that workers receive in exchange for, or in the context of, work (the “niches sociales”). Noting also the Ministers’ resolve to enhance the fairness of social levies, the Committee requests the Government to give its views on the Court of Auditors’ idea of a reform of the employers’ share of social contributions and a thorough review of existing distortions in the light of the different forms of remuneration and sizes of enterprise. The Committee observes in this context that significant resources are withdrawn from social security to the benefit of economic interests which are sometimes far removed from the objectives of social security. To divert social security resources to other ends, however important they may be, is liable to adversely affect the sound management and financial balance of the system and lead to fraud or misuse of the resources. In any event, there is a need for more thorough checking that resources from the social allowances granted by the State are effectively and efficiently used. For its part, international social security law allows social security resources to be used, for instance to promote the national policy for full employment, but it specifies that where subsidies are granted by the State or the social security system to save jobs, the Government must take the necessary steps to ensure that they are used as planned and to prevent fraud or any misuse by beneficiaries (Employment Promotion and Protection against Unemployment Convention, 1988 (No. 168), 1988, Articles 7 and 30). Given the extent of the exemptions granted to employers, the Committee requests the Government to indicate how far the application of these arrangements by enterprises is assessed and supervised by the competent authorities, and to specify the role played by the National Committee to Combat Social Protection Fraud.

Part II (Medical care). In its conclusions of 2005, the Committee took note of Act No. 2004-810 of 13 August 2004 on sickness insurance, which was a new step in the far-reaching reforms made necessary by a deterioration in the financial position of the sickness insurance system. With regard to the financial effects of the reform, the Government indicates in its twentieth report that following a drop in the deficit in 2005, sickness insurance expenditure again began to grow more rapidly than anticipated as from mid-2006, particularly expenditure on non-hospital medical care, daily sickness benefits and drugs. The warning system introduced by the 2004 reform raised the alert in the spring of 2007 and sickness insurance funds had to submit adjustment plans to limit the growth in expenditure. Accepted by the Government, it will give rise to immediate measures with a view to reinforcing control of medical care, development of outpatient surgery and fraud control – measures, the burden of which would be shared fairly between insured persons, health professionals and the health product industry. In autumn 2007, the Government should propose more structural mechanisms to Parliament, with the aim of regulating health expenditure on a more sustainable basis. Study is under way of the best sources of financing for social security, including the replacement of a part of employers’ social contributions by a supplementary value added tax, which would go to social security. Furthermore, sickness insurance is to be one of the six major public policies to be reviewed in 2007–08 in the context of the “general revision of public policies” introduced by the new Government. The report confirms the latter’s resolve to pursue the efforts for financial recovery and improvement of the quality and efficiency of the health system which began with the Act of 13 August 2004, while implementing an ambitious health policy and ensuring that users are afforded better access to care, prevention and drug innovation.

The Committee takes due note of this statement. It also notes from the main indicators of the general state of health in France that the health of the population is good and tending to improve. The report indicates, however, that although the universal sickness cover (CMU) introduced in 2000 has contributed significantly to improving the health of the least affluent, there are still considerable disparities between men and women, between regions or between social categories, and that in certain population groups and for certain pathologies worrying situations still exist. Progress could be made by prevention and improved coverage, for all age groups. With regard to patient cost sharing, the Government refers to the 2007 report of the High Council for the future of sickness insurance, which shows that the changes have had no major impact on the level of cover, which is offset in part by supplementary insurance, that there has been no departure from the principle that the basic schemes cover, in its entirety, major expenditure on care, and that the system is still consistent with the principles of solidarity. It nonetheless indicates instances of high non-refundable costs (for long-term illnesses, for example), particularly where the patient has no supplementary insurance (7–8 per cent of the population). The Social Security Financing Act for 2007 raised the upper limit of income for entitlement to assistance for the purchase of supplementary health insurance from 15 to 20 per cent above the income ceiling for access to supplementary CMU. There are also tax and social incentives for private insurers to offer supplementary contracts that show “responsibility” and “solidarity”. In view of the scope of the measures for the financial recovery of the system and the fact that a growing share of sickness insurance costs continues to be shifted to patients, health professionals and the health products industry, the Committee requests the Government in its next report to give an account of its new public health policy for sickness insurance, specifying the measures taken to ensure that the system is sustainable in the long term and that high-quality services are actually available for all.

Part V (Old-age benefit). In its direct requests of 2004 and 2005, the Committee requested the Government to provide detailed information on how Act No. 2003-775 of 20 August 2003 reforming pensions is affecting the application of each Article of Part V of the Convention. It reiterates that request. Since the Act raises the length of full insurance to 160 quarters and reduces the pension for missing years, the Committee also drew the Government’s attention to the fact that an old-age benefit of the minimum level required by the Convention (40 per cent of the reference wage) must be secured in all cases for a standard beneficiary (with a wife of pensionable age) who has completed the qualifying period set out in Article 29, paragraph 1(a), of the Convention (30 years or 120 quarters of contribution or employment), and that a reduced benefit must be secured at least after a qualifying period of 15 years, under paragraph 2(a) of the same Article. The Committee nonetheless observes that the replacement rate in the Government’s nineteenth report is calculated in reference to “a man of 60 years with 160 quarters of insurance in 2004, having a spouse of pensionable age with her own entitlements, and two children”. In this case, the full rate pension in 2004 reaches 52.7 per cent of the reference wage (gross monthly wage of a male skilled worker in metallurgy and metal processing). Recalculated for a standard beneficiary of 60 years without children and with 120 quarters of insurance, the pension reaches only 37.5 per cent, which is below the level prescribed by the Convention. The report nonetheless indicates that although the old-age pension may be provided as from age 60, this is an option and not an obligation. For a full-rate (50 per cent) pension to be granted at 60 years, the insured person must have accumulated 160 quarters under basic schemes as a whole. At age 65, on the other hand, the pension is paid at the full rate regardless of the length of insurance. If the insured person has been in the scheme for less than 160 quarters, the pension payable is pro rata. In view of these explanations, the Committee requests the Government to include in its next report an updated calculation of the replacement rate of the old-age pension for a standard beneficiary of 65 years with 120 quarters of insurance, without children and with a spouse of pensionable age having no own entitlements. Please also explain how the reduced pension paid after 15 years of insurance is calculated, bearing in mind that, according to the report, as from 2008 the wage taken as a basis for calculating the pension will be the average of the 25 years of insurance. With regard to the length of the qualifying period in particular, please indicate all breaks in the insurance career or periods of reduced activity that may be counted with a view to increasing the length of insurance.

[The Government is asked to reply in detail to the present comments in 2008.]

Direct Request (CEACR) - adopted 2006, published 96th ILC session (2007)

The Committee notes that the Government’s report has not been received. It hopes that a report will be supplied for examination by the Committee at its next session and that it will contain full information on the matters raised in its previous direct request, which read as follows:

The Committee notes, from the seventeenth annual report submitted by the Government of France to the Council of Europe on the application of the European Code of Social Security, the important modifications in French social security legislation which affect in particular Parts II, V and VII of the Convention. So as to be able to assess their impact on the application of the various provisions of the Convention, the Committee would be grateful to be provided with additional information on the following points:

Part II (Medical care) of the Convention. According to the report, the substantial and rising deficit of the health branch, at over €10 billion in 2003, led the Government to announce its intention in October 2003 to undertake an in-depth adaptation of health insurance to guarantee the durability of the current system, which is based on solidarity, universality, free choice of practitioner and quality for all. A diagnosis of the causes of the current situation was undertaken in January by the High Council for the Future of Health Insurance, composed of parliamentarians, social partners, representatives of the State and of institutions, health care professionals, users and experts. On this basis, and following a period of dialogue, a Bill has recently been submitted to Parliament. It includes measures intended to secure both better medical control and better governance of the health system, while at the same time increasing the income of the health insurance system. These measures should enter into force in 2005 and the objective of the Bill is to achieve financial equilibrium in 2007. In the meantime, the Act of 2004 respecting the financing of social security has established a series of emergency measures designed to increase resources so as to stabilize the health insurance deficit in 2004. These include: an increase in the tax on tobacco and the contribution based on the promotional expenditure of pharmaceutical laboratories; the establishment of an extraordinary contribution by the pharmaceutical industry based on the turnover achieved in France in 2004; and a specific contribution based on the commercial expenditure of producers and distributors of medical equipment.

The Committee notes the scope and urgency of the problems encountered by the Government and the national mobilization to safeguard the system of health insurance based on the principles of solidarity, universality and quality health care for all, which are also the principles underlying Part II of the Convention. It recalls that, irrespective of the situation, the Government has to accept general responsibility for the due provision of the benefits provided in compliance with the Convention and to take all measures required for this purpose (Article 71(3) of the Convention). To maintain the financial equilibrium, it is under the obligation, among other measures, to ensure that the necessary actuarial studies and calculations are made periodically and therefore any necessary changes in contribution rates or the taxes allocated to covering the contingencies in question or, finally, the volume of benefits themselves. Although the measures set out in Article 71(3) are essentially intended to prevent situations of crisis through the judicious and forward-looking governance of the system, compliance with this provision becomes particularly important for the management of emergency measures. The same applies to the general responsibility that the Government has to assume for the proper administration of social security institutions and services (Article 72(2) of the Convention), which is rendered still more difficult under the conditions of a substantial and rising deficit for the health branch. The Committee notes from the Government’s report that it is assuming the general responsibilities envisaged by the Convention with regard to the provision of benefits and the administration of the health branch and that it is taking measures to improve the situation in the short term. However, it requests the Government to continue providing detailed information and data showing the effectiveness of these measures in relation to its objective of returning the branch to equilibrium by 2007. It would also like to be informed of the measures adopted or envisaged to safeguard the long-term future of the system.

In this context, the Committee draws the Government’s attention to the fact that, in accordance with Article 71(1) of the Convention, the implementation of measures, both emergency and long-term, has to be such that hardship is avoided for persons of small means and the economic situation of the classes of persons protected is taken into account. With regard to the volume of benefits provided by the branch, the Government, while seeking better financial and medical control of health insurance, has to ensure that the benefits provided are not merely confined to care in respect of medical conditions, but are also intended to maintain and improve the health of the persons protected (Articles 7 and 10(3) of the Convention), having recourse, in so far as possible, to general public health services (Article 10(4)). The Committee wishes to recall in this respect Recommendation 1626 (2003) of the Parliamentary Assembly of the Council of Europe concerning the reform of health care systems in Europe, which specifies that “the main criterion for judging the success of health system reforms should be effective access to health care for all without discrimination, which is a basic human right. This also has the consequence of improving the general standard of health and welfare of the entire population”. Bearing these considerations in mind, the Committee requests the Government to provide the text of the above legislation, when it has been adopted, accompanied by detailed explanations of the impact that it could have on the application of each of the Articles of Part II of the Convention.

The Government also indicates in its report that Act No. 2003-1199, of 18 December 2003, respecting the financing of social security, embarked upon a major reform of the method of financing of public and private hospitals by organizing the progressive transition between 2004 and 2012 towards the itemization of charges based on the care provided. It strengthens the role of regional institutions in the policy of containing expenditure on out-patient care. Finally, it modifies the procedure for access to exemptions from cost-sharing by patients suffering from “long-term conditions”. Reimbursement of care and benefits at the rate of 100 per cent will be limited to those determined in a diagnosis and care protocol drawn up jointly by the patient’s personal doctor and the advisory doctor of the health insurance fund. While recognizing the need for the policy to contain expenditure on out-patient care, the Committee recalls that specialist care provided at hospitals for out-patients constitutes not only an essential element of the benefits envisaged in Part II of the Convention, but also the type of care which offers the best cost/effectiveness ratio, as shown by the common experience of developed countries. With regard to the transition to itemized charges for hospital care, and the new procedure for exemption from cost-sharing in the case of long-term illness, the Committee draws attention to the fact that, under Article 10(2) of the Convention, the rules relating to the sharing by beneficiaries or their breadwinners in the cost of medical care have to be designed so as to avoid hardship. The Committee would like the Government’s next report to contain fuller information on this subject.

Part V (Old-age benefit). The Committee notes the adoption of Act No. 2003‑775, of 21 August 2003, reforming pensions, which is intended to safeguard the pay-as-you-go pensions system by ensuring its financial equilibrium up to 2020. According to the Government’s report, the reform is based on three main areas: (1) securing a high level of retirement benefits by prolonging working life and the period of insurance; (2) preserving the equity and spirit of social justice of retirement schemes; and (3) enabling each individual to build up her or his retirement provision by allowing greater flexibility and freedom of choice. Several measures have been adopted to achieve national mobilization to promote work by employees over 55 years of age. The age at which workers are automatically placed in retirement by employers without this constituting dismissal is being progressively raised to 65 years by 2008. Progressive retirement is being improved by ensuring that continued part-time work gives rise to additional pension entitlements and the rules relating to the combination of paid work and definitive retirement benefits are being made more flexible and harmonized.

With regard to the parameters of the retirement system as set out in the Convention, such as the qualifying period and the minimum rate of the replacement income, the Committee notes in particular that the reform is intended to secure a high level of retirement benefits, averaging two-thirds of income from employment by 2020, by prolonging the period of insurance and of work. The common minimum age set out in law for retirement remains 60 years. However, the reference period for the calculation of the retirement pension in the general scheme is being raised from 150 to 160 quarters by 2008. The minimum period of contributions to obtain a full-rate retirement benefit will therefore rise to 40 years. The convergence upon 40 years of contributions in 2008 for private sector employees, public officials and the self-employed will then develop so as to maintain the ratio to the average length of retirement constant up to 2020 in view of rising life expectancy. To do so, the Act envisages the extension of the contribution period by one quarter every year between 2009 and 2012. The length of contributions necessary to obtain a full-rate retirement benefit will accordingly reach 41 years in 2012, unless this period is modified on the basis of a public report by the Government forwarded to Parliament before
1 January 2008, and may then reach 41 and three-quarter years in 2020. Periods of work covered by contributions may be supplemented by the validation of periods of the interruption or reduction of work on grounds of family responsibilities up to a ceiling of three years for children born or adopted after 1 January 2004. Workers bringing up a severely disabled child may benefit from the granting of a supplementary period of insurance up to a ceiling of two years. Workers may buy back periods spent studying, up to a maximum of three years. Contribution options based on full-time equivalents are available for part-time workers.

With regard to the calculation of the old-age benefit, a pension supplement, known as a surcote, is established for periods of contribution beyond the age of 60 years and the completion of 160 quarters of contribution. Pension reductions, known as décotes, will be progressively reduced from 10 to 5 per cent for each missing year from the contribution period between 2004 and 2013 (between 2006 and 2020 for the public sector). Persons who have a full career at the minimum wage will be guaranteed a retirement objective in 2008 (basic and compulsory supplementary pay-as-you-go) of 85 per cent of the net minimum wage (SMIC). Minimum contributory pensions will be supplemented by up to 8 per cent based on the periods for which contributions have actually been paid by the worker. The reform ensures that the various categories of retirees benefit from the same indexation of their pensions and non-contributory benefits, which will henceforth be aligned with prices.

In view of the extension of the insurance period and the reduction of pension benefits for missing years, the Committee draws attention to the fact that an old-age benefit of the minimum level required by the Convention (40 per cent of the reference wage) must be secured in all cases for a standard beneficiary (with a spouse of pensionable age) who has completed the qualifying period set out in Article 29, paragraph 1(a), of the Convention (30 years of contribution or employment) and a reduced benefit must be secured at least after a qualifying period of 15 years, under paragraph 2(a) of the same Article. The Committee would be grateful if the Government would provide detailed information in its next report on the impact of Act No. 2003-775 on the application of each of the Articles of Part V of the Convention, including statistical information, as requested in the report form under Article 76, paragraph 1(b)(i) and (ii) (in relation with Article 65 or 66) as they relate to old-age benefit. With regard more particularly to the qualifying period, please indicate any periods of interruption of the contribution period or of reduced working time which may be validated with a view to supplementing the insurance period. With regard to the calculation of benefits, please indicate the amount of retirement pension which will be received in 2008 by a standard beneficiary who has completed 30 years of contributions and employment at the minimum wage. The Committee would also be grateful if the Government would indicate the extent to which it envisages taking into account, for the purposes of the application of Part V of the Convention, in addition to the general old-age insurance scheme, the benefits provided by the various compulsory supplementary and additional retirement schemes (such as ARRCO, AGIRC, the additional compulsory retirement scheme for public officials established on 1 January 2005), and by the voluntary retirement insurance and savings schemes (PPESV, PERCO, PERP) referred to in the report. Finally, the Committee reserves the possibility of examining the whole of the new legislation in detail when it has received the information requested, accompanied by the relevant legislative texts.

Part VII (Family benefit). With a view to significantly improving the reconciliation of family and working life, while at the same time simplifying benefits by making them easier to understand, the Act respecting the financing of social security for 2004 established a new family benefit intended to facilitate the arrival, maintenance and bringing up of young children as from the first child: the benefits related to birth and adoption (young child allowances (APJE) and adoption allowances (AA) and assistance for the care of young children (parental allowance for bringing up children (APE), assistance to the family for the employment of an approved maternal assistant (AFEAMA) and the allowance for child care at home (AGED)) are replaced by the benefit for the care of young children (PAJE).

The PAJE is intended to reconcile in the same benefit the objectives of family policy and those of economic and employment growth with a view to increasing both the birth rate and the participation rate in the medium term. It includes, as a first stage, a birth subsidy paid at the seventh month of pregnancy or an adoption subsidy (€812.37), followed by a basic allowance provided from birth for three years (€162.47 a month). The means-related condition is relaxed and should raise the number of beneficiary families from 80 to 90 per cent.

The PAJE includes a second phase relating to choices concerning the care and upbringing of children. The supplement for free choice of employment is granted to a parent who chooses not to be engaged in her or his occupational activity, or to exercise it on a part-time basis to care for a child for a period which varies according to the rank of the child (a maximum of six months for a child of the first rank and three years for a child of the second or higher rank). This supplement is granted without conditions as to means, but as a function of a period of previous activity, which also differs according to the rank of the child (€504.11 a month in the absence of occupational activity, €383.33 for work of up to 50 per cent and €289.87 for work between 50 and 80 per cent). Parents wishing to continue working receive a supplement for free choice of the manner of providing care, including the coverage of all or part of the social contributions relating to the employment of a maternal assistant or a carer at home, and part of the wages of these persons up to a ceiling that varies according to the family income. The supplement is paid up to the age of
6 years, although its amount is reduced by 50 per cent between 3 and 6 years of age (between €152.54 and €355.96 a month for a child between 0 and 3 years).

In view of the above changes, the Committee requests the Government to provide up to date statistical information, as required by the report form under Article 44 of the Convention, with regard to the total amount of family benefit.

Direct Request (CEACR) - adopted 2004, published 93rd ILC session (2005)

The Committee notes, from the seventeenth annual report submitted by the Government of France to the Council of Europe on the application of the European Code of Social Security, the important modifications in French social security legislation which affect in particular Parts II, V and VII of the Convention. So as to be able to assess their impact on the application of the various provisions of the Convention, the Committee would be grateful to be provided with additional information on the following points:

Part II (Medical care) of the Convention. According to the report, the substantial and rising deficit of the health branch, at over €10 billion in 2003, led the Government to announce its intention in October 2003 to undertake an in-depth adaptation of health insurance to guarantee the durability of the current system, which is based on solidarity, universality, free choice of practitioner and quality for all. A diagnosis of the causes of the current situation was undertaken in January by the High Council for the Future of Health Insurance, composed of parliamentarians, social partners, representatives of the State and of institutions, health care professionals, users and experts. On this basis, and following a period of dialogue, a Bill has recently been submitted to Parliament. It includes measures intended to secure both better medical control and better governance of the health system, while at the same time increasing the income of the health insurance system. These measures should enter into force in 2005 and the objective of the Bill is to achieve financial equilibrium in 2007. In the meantime, the Act of 2004 respecting the financing of social security has established a series of emergency measures designed to increase resources so as to stabilize the health insurance deficit in 2004. These include: an increase in the tax on tobacco and the contribution based on the promotional expenditure of pharmaceutical laboratories; the establishment of an extraordinary contribution by the pharmaceutical industry based on the turnover achieved in France in 2004; and a specific contribution based on the commercial expenditure of producers and distributors of medical equipment.

The Committee notes the scope and urgency of the problems encountered by the Government and the national mobilization to safeguard the system of health insurance based on the principles of solidarity, universality and quality health care for all, which are also the principles underlying Part II of the Convention. It recalls that, irrespective of the situation, the Government has to accept general responsibility for the due provision of the benefits provided in compliance with the Convention and to take all measures required for this purpose (Article 71(3) of the Convention). To maintain the financial equilibrium, it is under the obligation, among other measures, to ensure that the necessary actuarial studies and calculations are made periodically and therefore any necessary changes in contribution rates or the taxes allocated to covering the contingencies in question or, finally, the volume of benefits themselves. Although the measures set out in Article 71(3) are essentially intended to prevent situations of crisis through the judicious and forward-looking governance of the system, compliance with this provision becomes particularly important for the management of emergency measures. The same applies to the general responsibility that the Government has to assume for the proper administration of social security institutions and services (Article 72(2) of the Convention), which is rendered still more difficult under the conditions of a substantial and rising deficit for the health branch. The Committee notes from the Government’s report that it is assuming the general responsibilities envisaged by the Convention with regard to the provision of benefits and the administration of the health branch and that it is taking measures to improve the situation in the short term. However, it requests the Government to continue providing detailed information and data showing the effectiveness of these measures in relation to its objective of returning the branch to equilibrium by 2007. It would also like to be informed of the measures adopted or envisaged to safeguard the long-term future of the system.

In this context, the Committee draws the Government’s attention to the fact that, in accordance with Article 71(1) of the Convention, the implementation of measures, both emergency and long-term, has to be such that hardship is avoided for persons of small means and the economic situation of the classes of persons protected is taken into account. With regard to the volume of benefits provided by the branch, the Government, while seeking better financial and medical control of health insurance, has to ensure that the benefits provided are not merely confined to care in respect of medical conditions, but are also intended to maintain and improve the health of the persons protected (Articles 7 and 10(3) of the Convention), having recourse, in so far as possible, to general public health services (Article 10(4)). The Committee wishes to recall in this respect Recommendation 1626 (2003) of the Parliamentary Assembly of the Council of Europe concerning the reform of health care systems in Europe, which specifies that "the main criterion for judging the success of health system reforms should be effective access to health care for all without discrimination, which is a basic human right. This also has the consequence of improving the general standard of health and welfare of the entire population". Bearing these considerations in mind, the Committee requests the Government to provide the text of the above legislation, when it has been adopted, accompanied by detailed explanations of the impact that it could have on the application of each of the Articles of Part IIof the Convention.

The Government also indicates in its report that Act No. 2003-1199, of 18 December 2003, respecting the financing of social security, embarked upon a major reform of the method of financing of public and private hospitals by organizing the progressive transition between 2004 and 2012 towards the itemization of charges based on the care provided. It strengthens the role of regional institutions in the policy of containing expenditure on out-patient care. Finally, it modifies the procedure for access to exemptions from cost-sharing by patients suffering from "long-term conditions". Reimbursement of care and benefits at the rate of 100 per cent will be limited to those determined in a diagnosis and care protocol drawn up jointly by the patient’s personal doctor and the advisory doctor of the health insurance fund. While recognizing the need for the policy to contain expenditure on out-patient care, the Committee recalls that specialist care provided at hospitals for out-patients constitutes not only an essential element of the benefits envisaged in Part II of the Convention, but also the type of care which offers the best cost/effectiveness ratio, as shown by the common experience of developed countries. With regard to the transition to itemized charges for hospital care, and the new procedure for exemption from cost-sharing in the case of long-term illness, the Committee draws attention to the fact that, under Article 10(2) of the Convention, the rules relating to the sharing by beneficiaries or their breadwinners in the cost of medical care have to be designed so as to avoid hardship. The Committee would like the Government’s next report to contain fuller information on this subject.

Part V (Old-age benefit). The Committee notes the adoption of Act No. 2003-775, of 21 August 2003, reforming pensions, which is intended to safeguard the pay-as-you-go pensions system by ensuring its financial equilibrium up to 2020. According to the Government’s report, the reform is based on three main areas: (1) securing a high level of retirement benefits by prolonging working life and the period of insurance; (2) preserving the equity and spirit of social justice of retirement schemes; and (3) enabling each individual to build up her or his retirement provision by allowing greater flexibility and freedom of choice. Several measures have been adopted to achieve national mobilization to promote work by employees over 55 years of age. The age at which workers are automatically placed in retirement by employers without this constituting dismissal is being progressively raised to 65 years by 2008. Progressive retirement is being improved by ensuring that continued part-time work gives rise to additional pension entitlements and the rules relating to the combination of paid work and definitive retirement benefits are being made more flexible and harmonized.

With regard to the parameters of the retirement system as set out in the Convention, such as the qualifying period and the minimum rate of the replacement income, the Committee notes in particular that the reform is intended to secure a high level of retirement benefits, averaging two-thirds of income from employment by 2020, by prolonging the period of insurance and of work. The common minimum age set out in law for retirement remains 60 years. However, the reference period for the calculation of the retirement pension in the general scheme is being raised from 150 to 160 quarters by 2008. The minimum period of contributions to obtain a full-rate retirement benefit will therefore rise to 40 years. The convergence upon 40 years of contributions in 2008 for private sector employees, public officials and the self-employed will then develop so as to maintain the ratio to the average length of retirement constant up to 2020 in view of rising life expectancy. To do so, the Act envisages the extension of the contribution period by one quarter every year between 2009 and 2012. The length of contributions necessary to obtain a full-rate retirement benefit will accordingly reach 41 years in 2012, unless this period is modified on the basis of a public report by the Government forwarded to Parliament before 1 January 2008, and may then reach 41 and three-quarter years in 2020. Periods of work covered by contributions may be supplemented by the validation of periods of the interruption or reduction of work on grounds of family responsibilities up to a ceiling of three years for children born or adopted after 1 January 2004. Workers bringing up a severely disabled child may benefit from the granting of a supplementary period of insurance up to a ceiling of two years. Workers may buy back periods spent studying, up to a maximum of three years. Contribution options based on full-time equivalents are available for part-time workers.

With regard to the calculation of the old-age benefit, a pension supplement, known as a surcote, is established for periods of contribution beyond the age of 60 years and the completion of 160 quarters of contribution. Pension reductions, known as décotes, will be progressively reduced from 10 to 5 per cent for each missing year from the contribution period between 2004 and 2013 (between 2006 and 2020 for the public sector). Persons who have a full career at the minimum wage will be guaranteed a retirement objective in 2008 (basic and compulsory supplementary pay-as-you-go) of 85 per cent of the net minimum wage (SMIC). Minimum contributory pensions will be supplemented by up to 8 per cent based on the periods for which contributions have actually been paid by the worker. The reform ensures that the various categories of retirees benefit from the same indexation of their pensions and non-contributory benefits, which will henceforth be aligned with prices.

In view of the extension of the insurance period and the reduction of pension benefits for missing years, the Committee draws attention to the fact that an old-age benefit of the minimum level required by the Convention (40 per cent of the reference wage) must be secured in all cases for a standard beneficiary (with a spouse of pensionable age) who has completed the qualifying period set out in Article 29, paragraph 1(a), of the Convention (30 years of contribution or employment) and a reduced benefit must be secured at least after a qualifying period of 15 years, under paragraph 2(a) of the same Article. The Committee would be grateful if the Government would provide detailed information in its next report on the impact of Act No. 2003-775 on the application of each of the Articles of Part V of the Convention, including statistical information, as requested in the report form under Article 76, paragraph 1(b)(i) and (ii) (in relation with Article 65 or 66) as they relate to old-age benefit. With regard more particularly to the qualifying period, please indicate any periods of interruption of the contribution period or of reduced working time which may be validated with a view to supplementing the insurance period. With regard to the calculation of benefits, please indicate the amount of retirement pension which will be received in 2008 by a standard beneficiary who has completed 30 years of contributions and employment at the minimum wage. The Committee would also be grateful if the Government would indicate the extent to which it envisages taking into account, for the purposes of the application of Part V of the Convention, in addition to the general old-age insurance scheme, the benefits provided by the various compulsory supplementary and additional retirement schemes (such as ARRCO, AGIRC, the additional compulsory retirement scheme for public officials established on 1 January 2005), and by the voluntary retirement insurance and savings schemes (PPESV, PERCO, PERP) referred to in the report. Finally, the Committee reserves the possibility of examining the whole of the new legislation in detail when it has received the information requested, accompanied by the relevant legislative texts.

Part VII (Family benefit). With a view to significantly improving the reconciliation of family and working life, while at the same time simplifying benefits by making them easier to understand, the Act respecting the financing of social security for 2004 established a new family benefit intended to facilitate the arrival, maintenance and bringing up of young children as from the first child: the benefits related to birth and adoption (young child allowances (APJE) and adoption allowances (AA) and assistance for the care of young children (parental allowance for bringing up children (APE), assistance to the family for the employment of an approved maternal assistant (AFEAMA) and the allowance for child care at home (AGED)) are replaced by the benefit for the care of young children (PAJE).

The PAJE is intended to reconcile in the same benefit the objectives of family policy and those of economic and employment growth with a view to increasing both the birth rate and the participation rate in the medium term. It includes, as a first stage, a birth subsidy paid at the seventh month of pregnancy or an adoption subsidy (€812.37), followed by a basic allowance provided from birth for three years (€162.47 a month). The means-related condition is relaxed and should raise the number of beneficiary families from 80 to 90 per cent.

The PAJE includes a second phase relating to choices concerning the care and upbringing of children. The supplement for free choice of employment is granted to a parent who chooses not to be engaged in her or his occupational activity, or to exercise it on a part-time basis to care for a child for a period which varies according to the rank of the child (a maximum of six months for a child of the first rank and three years for a child of the second or higher rank). This supplement is granted without conditions as to means, but as a function of a period of previous activity, which also differs according to the rank of the child (€504.11 a month in the absence of occupational activity, €383.33 for work of up to 50 per cent and €289.87 for work between 50 and 80 per cent). Parents wishing to continue working receive a supplement for free choice of the manner of providing care, including the coverage of all or part of the social contributions relating to the employment of a maternal assistant or a carer at home, and part of the wages of these persons up to a ceiling that varies according to the family income. The supplement is paid up to the age of 6 years, although its amount is reduced by 50 per cent between 3 and 6 years of age (between €152.54 and €355.96 a month for a child between 0 and 3 years).

In view of the above changes, the Committee requests the Government to provide up-to-date statistical information, as required by the report form under Article 44 of the Convention, with regard to the total amount of family benefit.

Observation (CEACR) - adopted 2002, published 91st ILC session (2003)

With reference to its previous comments concerning Part IV (Unemployment benefit), the Committee notes with satisfaction that the "agreement of 1 January 2001 on assistance for return to employment and unemployment insurance" contains an amendment to article 31 in order to give effect to the requirements of Article 24, paragraph 3, of the Convention by reducing the waiting period for payment of the benefit to the first seven days of unemployment.

Direct Request (CEACR) - adopted 1996, published 85th ILC session (1997)

With reference to its previous comments, the Committee notes the information contained in the Government's reports on Convention No. 102 and on the application of the European Code of Social Security for the period 1995-96 (ninth report), as well as the comments made by the General Confederation of Labour "Force Ouvrière" concerning the application of the Convention, which were transmitted by the Government with its report.

Part IV (Unemployment benefit), Article 24, paragraph 3, of the Convention. The Committee recalls that section 76 of the regulations appended to the agreement dated 1 January 1994 concluded by the social partners, for a duration of three years, on the basis of the Joint Protocol Agreement of 22 July 1993 respecting unemployment insurance, which was approved by Ministerial Order of 4 January 1994, provides for a waiting period of eight days for the payment of the benefit in the event of unemployment. However, in accordance with Article 24, paragraph 3, of Convention No. 102, a waiting period of only seven days in each case of suspension of earnings is authorized.

The Committee notes in this respect that the Government's report does not contain any new elements. It notes, however, that the period for which the above agreement and its regulations were concluded expires on 31 December 1996. The Committee therefore hopes that, when these texts are renewed and approved, the necessary measures will be taken to give full effect to the provisions of Convention No. 102 on this point. It would be grateful if the Government would inform it of the progress achieved in this respect in its next report.

Furthermore, with regard to Part XI (Standards to be complied with by periodical payments), Article 65, in relation to the following Parts of the Convention: Part V (Old-age benefit), Article 28; Part VIII (Maternity benefit), Article 50; and Part IX (Invalidity benefit), Article 56, the Committee notes the information supplied by the Government in its ninth report on the application of the Code with regard to the wage of a skilled manual male employee in the private and semi-public sectors for full working hours in 1994 and 1995, as indicated by INSEE statistics. The Committee also notes the information supplied by the Government in the context of Convention No. 102 and by Force Ouvrière concerning the maximum wage subject to contributions (general scheme) on 1 July 1996. Subject to the difference in the reference periods between the figures for the maximum wage subject to contributions and for the wage of a skilled manual male employee, these statistics have permitted the Committee to note that the ceiling fixed by wages subject to contribution does not affect the old-age, maternity and invalidity benefit provided to a standard beneficiary whose wage is equal to or lower than that of a skilled manual male employee, and that the level prescribed by the Convention for the above benefits should therefore be attained. The Committee however hopes that in its next report the Government will be in a position to confirm this conclusion by providing statistical data for the same reference period with regard to the above Parts of the Convention and in the manner indicated in the report form (Article 65, Titles I to V of the Convention). The Committee would also be grateful if the Government would provide the statistical information required by the report form under Article 65, Title VI, of the Convention.

Finally, the Committee requests the Government to supply the statistics required by the report form with regard to the level of benefit for employment injury (Part VI) and family benefit (Part VII).

Direct Request (CEACR) - adopted 1994, published 81st ILC session (1994)

The Committee notes the Government's report. It notes, however, that it does not contain the information requested in its previous comments, and therefore once again asks the Government to provide information on the following point.

Part XI (Standards to be complied with by periodical payments), Article 65, in relation to the following parts of the Convention: Part V (Old-age benefit), Article 28: Part VIII (Maternity benefit), Article 50; and Part IX (Invalidity benefit), Article 56. In its previous comments the Committee noted the statistical information supplied by the Government in its fifth report on the application of the European Code of Social Security. It noted, however, that the Government did not state whether, for employees covered by the general scheme, the amount of old age, maternity and invalidity benefit (for invalids of the second category) corresponded, for a standard beneficiary, to the percentages required by the Convention, when the previous earnings of the beneficiary were equal to the wage of a skilled manual male employee, in accordance with the provisions of Article 65, paragraph 3, of the Convention (the wage taken into account for the calculation of benefits is subject to a ceiling). The Committee is bound once again to express the hope that the Government will be able to compile the required statistics relating to the above-mentioned provisions of the Convention in the manner set out in the report form adopted by the Governing Body indicating, in particular, the wage of a skilled manual male employee determined in accordance with Article 65, paragraph 6 or 7. The Committee also asks the Government to indicate the maximum wage taken into account for the calculation of the above benefits.

The Committee would also like to point out the following:

Part IV (Unemployment benefit). The Committee notes the information supplied by the Government in its report on Convention No. 44. It has also examined the new agreement of 1 January 1993 and its appended regulations. With particular reference to Article 24, paragraph 3, of the Convention, the Committee asks the Government to indicate how effect is given to this provision of the Convention which specifies that the benefit need not be paid for a waiting period of the first seven days in each case of suspension of earnings, in view of the fact that the new provisions of Article 4(B) of the joint agreement of 22 July 1993 on unemployment insurance and the tripartite agreement of 23 July 1993 have increased the waiting period from seven to eight days.

The Committee would also be grateful if the Government would provide detailed information on how effect is given in practice to the requirement in section 79(b) of the regulations appended to the above-mentioned agreement of 1 January 1993, that the payment of allowances must be interrupted on the day on which the person concerned is admitted to unremunerated training for a total period of at least 40 hours, and on how this ties in with the provisions on training allowances provided for in sections 53 et seq. of the regulations.

Direct Request (CEACR) - adopted 1993, published 80th ILC session (1993)

The Committee notes that the Government's report has not been received. It notes, however, the information supplied by the Government in its fifth report on the application of the European Code of Social Security with regard, in particular, to Article 44 of Part VII of that instrument (Value of family benefit).

Furthermore, the Committee hopes that a detailed report will be supplied for examination at its next session and that it will contain, in particular, information on the following point.

Part XI (Standards to be complied with by periodical payments), Article 65, in relation to the following Parts of the Convention: Part V (Old-age benefit), Article 28; Part VIII (Maternity benefit), Article 50; and Part IX (Invalidity benefit), Article 56. The Committee notes the statistical information supplied by the Government in its fifth report on the application of the European Code of Social Security. It notes, however, that the Government does not state whether, for employees covered by the general scheme, the amount of old-age, maternity and invalidity benefit (for invalids of the second category) corresponds, for a standard beneficiary, to the percentages required by the Convention, when the previous earnings of the beneficiary are equal to the wage of a skilled manual male employee, in accordance with the provisions of Article 65, paragraph 3, of the Convention (the wage taken into account for the calculation of benefits is subject to a ceiling). The Committee is bound once again to hope that the Government will be able to compile the statistical data required in relation to the above provisions of the Convention in the manner set out in the report form adopted by the Governing Body by reporting, in particular, the wage of a skilled manual male employee determined in accordance with Article 65, paragraph 6 or 7. The Committee also requests the Government to indicate the maximum wage taken into account for the calculation of the above benefits.

Direct Request (CEACR) - adopted 1990, published 77th ILC session (1990)

The Committee takes note of the information supplied by the Government in its report. It also notes the information provided in the Government's first report on the application of the European Code of Social Security, particularly with regard to the implementation of the new unemployment insurance scheme introduced by the agreement of 6 July 1988 and the regulations issued thereunder, which enable effect to be given to Part IV of the Convention (Unemployment Benefit).

With regard to the level of certain benefits, the Committee would be grateful if the Government would provide detailed information on the following points:

1. Part VII of the Convention (Family Benefit), Article 44. In its previous comments, the Committee asked the Government to provide the statistical information required by the report form under this provision of the Convention so that it could ascertain whether the amounts of the family benefits prescribed by the Convention are attained. As the Government has provided no information on the subject, the Committee trusts that the next report will contain all the statistical information required, and in particular:

- the total value of benefits in cash and kind paid for dependent children (except for the allowance for young children, the parental education allowance and the allowance for child care in the home);

- the amount of the wage of an ordinary male adult labourer determined in accordance with Article 66, paragraphs 4 and 5;

- the total number of children of all residents.

2. Part XI (Standards to be Complied with by Periodical Payments), Article 65 (in conjunction with the following parts of the Convention: Part V (Old-Age Benefit), Article 28; Part VIII (Maternity Benefit), Article 50, and Part IX (Invalidity Benefit), Article 56). The Committee again requests the Government to provide the information required by the report form for each of the benefits coming under the above Articles of the Convention. Since the above benefits are calculated on the basis of the former earnings of the beneficiary, the Government may wish to avail itself of Article 65, as indeed it has already expressly indicated, in calculating old-age and invalidity benefits. Furthermore, under French legislation, the wage subject to contributions which serves as the basis for calculating benefits paid for the above-mentioned contingencies may not exceed a given ceiling, the Committee asks the Government to indicate in its report, on the basis of appropriate statistics, whether the amounts of old-age, maternity and invalidity benefits correspond, for a standard beneficiary, to the percentages required by the Convention when the former earnings of the beneficiary are equal to the wage of a skilled manual male employee, in accordance with the provisions of paragraph 3 of Article 65 of the Convention. Please provide, in particular, all the statistics required by the report form under Article 65 of the Convention, and state, in particular, the wage of the skilled manual male employee selected according to paragraphs 6 or 7 of Article 65, and the maximum amount of the wage which is subject to contributions for the various contingencies.