Welfare in France (also known as social protection, from French: Protection sociale) includes all systems whose purpose is to protect people against the financial consequences of social risks (illness, maternity, old age, unemployment).
Contents
- Overview
- Organisation
- Social Security
- Complementary schemes
- UNEDIC
- Central government
- Allowances
- History
- Recent evolution
- References
Social welfare refers to all the mechanisms of collective foresight, enabling individuals to cope with the financial consequences of "social risks". These are situations that could jeopardize the economic security of the individual or his family (defined as a group of people bound by ties of lineage and alliance), causing a decline in its resources or increase its expenditure (old age, sickness, disability, unemployment, maternity, family responsibilities, etc.). In France, the welfare system make up for about 500 billion euros annually, or more than 30% of GDP.
The origin of social protection in France dates back to medieval times, with fraternal benefit societies. In the second half of the nineteenth century, systems of social assistance developed gradually, often launched by employers marked by social Catholicism, then relayed by the first laws. In 1930, modern social insurance was created, offering employees protection against certain risks: accidents, sickness, disability, maternity, old age, death ... During the Second World War, the National Council of Resistance designed the system of social security, now at the heart of social protection. It was created just after the Liberation, by an order of 4 October 1945, followed by other texts. Gradually, protection has covered the entire population, while the benefits extend.
When creating Social Security, France imitated more the Bismarckian system (insurance for workers) than the Beveridge one (widespread solidarity). Over the years, the solidarity (as opposed to a system of contributions) has gradually developed in the French system, which the foundation remains the concept of insurance. However, the desire to establish a universal system has faced opposition. This explains why the French welfare system is plural, with a wide variety of actors. The most important is the general scheme for employees of industry, commerce and services.
Overview
The French social protection system is gradually becoming universal, covering all individuals. At its origins (end of the nineteenth century), social protection has been built as a system of social insurance. Insurance was tied to the exercise of an occupation and the benefits were provided in case of the risk of loss of income due to the forced inactivity (accident, sickness, unemployment, old age). It only covered workers and their families. The right to social benefits depended on the payment of social security contributions, itself related to earnings. Non-employees, or individuals who have not contributed during their occupation, were entitled to welfare, reserved for cases of extreme distress.
Since its creation on October 4, 1945, Social Security administrations has had the objective of gradually extending social protection to all residents of the territory. Each member of the national community has now the right to benefit a minimum standard of living, whether exercising a profession and regardless of the ability to contribute. Indeed, the 22 August 1946 law extended the family allowances to the entire population.
The old age risk coverage has been almost universal since the establishment of minimum pension (1956) guaranteeing everyone a minimum pension, regardless of contributions to the mandatory pension insurance scheme. Health insurance has become universal after the establishment of personal insurance in case of sickness (1978) and especially since the Universal health coverage, established in 1999, allowing everyone to access a minimum of care. In addition, the "social minima", benefits ensuring a minimum income to a person in an insecure situation, offer anyone a minimum of resources to fight against the risk of social exclusion.
Organisation
The social protection is largely dependent on the state. The state is a key player in the field of social protection. It produces legal texts, oversees the various agencies (including the Social Security administrations) and partly finance social protection through taxes or subsidies. However, it plays a role more or less important in the various forms of social protection. Social protection is organized into four levels.
Social Security
The Social Security administrations provides basic coverage of four kind of risks: "illness, maternity, disability, death", "accidents , illnesses", "old age" and "family". Each of these four risks correspond to a branch. The system is divided in different schemes classifying people according to their professional activity. These four schemes are:
Social Security administrations, established by the State in 1945, are managed by the social partners (employers' representatives and trade unions). The resources of Social Security (payroll taxes, i.e. social contributions) and expenses (benefits and allowances) has been determined since 1996 by the laws of social security funding, voted annually by the Parliament. The funds are collected by the URSSAF.
Complementary schemes
The complementary schemes provide additional coverage for risks already covered by Social Security. Some are mandatory (supplemental pension plans of private sector employees) and other optional (mutual health insurance, pension plans). Social partners set only the amount of revenue and expenditure allocated to these schemes. However, there are mandatory schemes (unemployment insurance or pensions of employees), and schemes who remain optional (mutual benefit societies).
UNEDIC
The UNEDIC (National Union for Employment in Industry and Commerce) administers the unemployment insurance system.
Central government
The central government and the local administrations provide some assistance, mainly support to the poorest. Social assistance includes welfare benefits defined by law, and is therefore provided when conditions are met. They are provided and funded mainly by departments, but also by the central government (RMI or allowance for disabled adults).
Allowances
Social benefits amount to 30% of gross domestic product and around 45% of household income. Three quarters of these benefits are paid by social security. The Social Welfare Report, published annually distinguishes five categories of benefits for as many risks:
History
The 1789 the French Revolution replaced the solidarity performed in the home or business (corporations) by a national solidarity based on assistance, made official in the Declaration of Human Rights. But the deficiencies of the assistance gave birth early in the twentieth century to early attempts to create a social security system. During the industrialization revolution in the nineteenth century, some new forms of protection have been developed. The fraternal benefit societies, succeeding the corporations of the Old Regime abolished in 1791, based on voluntary collective foresight and limited to some activities or some businesses. They were legally recognized in 1835, and obtained full freedom of establishment and encouragement of the State in 1898. There were also local welfare systems for poor individual or family.
From the 1890s, the State imitated the measures developed by Otto von Bismarck in Germany. In 1893 was established free medical assistance. In 1904 the department of child welfare was created and in 1905 assistance to infirm and incurable old people. Mutual benefit societies, based on volunteering and social assistance, had benefited only a limited portion of the population. This is why early in the twentieth century, there were attempts to implement the insurance of certain social risks. In 1898 was recognized the responsibility of the employer in case of accidents on the workplace, with the possibility to ensure to cope with that risk. For old people a law in 1910 established a compulsory insurance scheme for employees of trade and industry. Laws in 1928 and 1930 set up insurance for the risks of illness, maternity, invalidity, old age and death for employees, plus a special scheme for farmers. In 1932, a law provided families with allowances to cover expenses, financed by employer. On the eve of World War II, France has, officially, a comprehensive protection system but that fragile.
In 1945 the objectives for the system of social security were the unification of the system, the generalization of the protection and the extension of the coverage of risks, under the dual influence of Beveridge report of 1942 and the Bismarckian roots. The 4 October 1945 Order provides a coordinated network of caisses replacing the multiple previous agencies. However, the unit was not achieved at that time. Agricultural occupations retained their specific institutions. Employees benefiting special arrangements refused to integrate into the general system, and retained their own system, declared "transitional", but which is still lasting. These specific arrangements concern officials, sailors, railway workers, miners, among others. The 19 October 1945 Order built a system for illness, maternity, invalidity, old age, death. A law in 1946 extended the family allowances to the entire population and another law incorporated injury at work to Social Security.
Recent evolution
In recent years, there were growing concerns about the rise in social exclusion among the population. According to a survey published by the CREDOC, a third of people between 25 and 59 had difficulty of insertion (unemployment during more than a year, beneficiaries of minimum social assistance or helped contract). On 2 October 2007, the newly elected French President Nicolas Sarkozy announced the organization of a Grenelle Insertion dedicated to the transformation of integration policies. Dedicated to return to work, the Grenelle insertion was concluded on 27 May 2008. It insisted on the need to reform the insertion system.
The various measures that had implemented to fight social exclusion -in particular the income support allowance (RMI), the single parent allowance (API) and the allocation disabled adult (AAH)- were criticized for favoring unemployment and working poverty, exclusion and precariousness. Indeed, the government claimed the gains from return to work, after a period of unemployment, were offset by the reduction of social benefits paid in the previous period. That led to threshold effects and to inactivity trap situations. The National Observatory of Poverty and social exclusion said that the number of excluded people was deteriorating, while the number of working poor's was increasing (1.7 million in 2005).
The Grenelle Insertion was initiated on November 2007 to establish, for 6 months, negotiations and talks between social partners to rethink the whole system of insertion. Notably, it was decided that the income of active solidarity (RSA) be implemented. The RSA is intended to offset the loss of certain social benefits when resuming employment and provides additional income to the working poor.