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Government announces family policy reforms

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At the annual Conference on the Family held at the end of April 2003, the French government announced a number of new family policy measures. Notably it is to introduce in 2004 a new benefit for parents of young children, replacing a number of existing schemes. The reaction of the social partners has been mixed.

The Conference on the Family (Conférence sur la famille) is an annual event to which the government invites elected politicians, the social partners and representatives of non-governmental organisations (NGOs) working in the area of family issues. The last conference, held in 2001, was an opportunity for the government to announce the extension of paternity leave (FR0107169F). Due to political changes, there was no conference in 2002 (FR0210102N).

The 2003 Conference on the Family

One of the most important new measures announced by the Prime Minister at the 2003 conference, held on 29 April, was the creation from 1 January 2004 of a new 'young children’s early days benefit' (prestation d’accueil du jeune enfant, PAJE). This benefit for the parents of young children is based on a promise made by Jacques Chirac in his successful campaign for the 2002 presidential election. For children born from 1 January 2004 onwards, the PAJE will replace four existing benefits:

  • the 'parental childraising allowance' (allocation parentale d’éducation, APE) - a flat-rate universal parental leave benefit for families with two or more children;
  • the 'young child’s allowance' (allocation pour jeune enfant, APJE) - a means-tested flat-rate benefit for families with a child under the age of three;
  • 'family aid for the employment of a registered childminder' (aide à la famille pour l’emploi d’une assistante maternelle agréée, AFEAMA) - an income-related benefit for families using the services of a registered childminder; and
  • the 'child home care allowance' (allocation de garde d’enfant à domicile, AGED) - an income-related benefit for families (de facto, better off families) hiring an employee to take care of their child at home.

The PAJE will be made up of two components: a basic allowance and a supplement taking various forms depending on the parents' choice.

The basic allowance is means-tested and is comprised of a special childbirth payment of EUR 800, followed by an allowance of EUR 159 per month for the first three years of the child’s life. There are two differences between this and the current APJE: the special payment is paid once instead of on a monthly basis during the pregnancy, though the total amount is identical; and the upper threshold for income (above which no benefit is payable) has been raised to a point where benefit will be granted to 200,000 extra families (bringing the total to between 80% and 90% of all families with a child under three).

The choice of the PAJE supplement (not means-tested) will be left to the parents. It may be provided in the form of either:

  • a supplement to be used for purchasing childcare, which is a merger of the current AGED and AFEAMA schemes. The sums involved, which vary according to income, have been raised greatly; or
  • a supplement to be used for financing time off work, which is equivalent to the current APE. The principal difference between the APE and the new benefit is its extension to families with one child (the APE applies only to those with two or more children), but only on condition that the parent taking leave has worked for the two previous years. If this criterion is met, the maximum payment period is six months, whereas the benefit is payable until the child is aged three in the cases of families with two or more children. The previous employment requirements have also been tightened up for families with two or three children, thus stressing the 'withdrawal from the labour market' dimension of this benefit.

Other less important measures were announced, including:

  • a family tax credit for companies to provide an incentive for them to introduce 'family-friendly' policy measures such as funding crèche places or helping employees to pay for childcare. This tax credit will cover up to 60% of the total cost involved;
  • a promise of 20,000 extra crèche places over the next five years as part of a 'crèche opening programme' encompassing company and inter-company crèches;
  • an opening up to the private sector through encouragement to set up private crèches; and
  • improving the status of registered childminders, so that it is aligned with the standard legal employment status (eg involving compulsory employment contracts, monthly payment and paid holidays). There will also be a relaxation of the certification regulations and career development through validation of work experience.

The measures announced mean an extra cost of around EUR 1.2 billion over the 2004-7 period, of which EUR 850 million will go on the PAJE alone.

Reactions

For the Movement of French Enterprises (Mouvement des entreprises de France, MEDEF), the main employers' confederation, the measures are heading 'in the right direction', especially the creation of a family tax credit for companies and the assistance provided in setting up private or company crèches.

The French Confederation of Professional and Managerial Staff-General Confederation of Professional and Managerial Staff (Confédération française de l'encadrement-Confédération générale des cadres, CFE-CGC) is generally satisfied with the extension of the basic allowance of the PAJE to families with higher incomes than was previously the case.

The General Confederation of Labour-Force Ouvrière (Confédération générale du travail-Force Ouvrière, CGT-FO) regards the announcements as a rehash of existing measures that does not satisfy expectations. CGT-FO feels that the measures are gimmicks rather than granting new rights, and considers that granting PAJE benefit for giving up work when the first child is born may mean that the parent concerned (mothers in 98% of cases) will give up work altogether.

In the view of the French Democratic Confederation of Labour (Confédération française démocratique du travail, CFDT), the PAJE’s main attraction is that it is a step toward simpler and more comprehensible legislation and greater universalism in child benefit allocation. The improvement in the status of registered childminders is also seen as a positive move. CFDT, however, has voiced some reservations about the extension of the APE to families with one child, seeing this as a potential 'disguised wage for mothers'. It is also anxious about perceived risks linked to the family tax credit for companies, in particular that of creating new inequalities between employees in small and large companies, and the confederation stresses that actions taken in this area at company level must be integrated into the scope of collective bargaining.

The French Christian Workers’ Confederation (Confédération française des travailleurs chrétiens, CFTC), a strong supporter of parental leave 'to raise children', is however concerned about the negative effect that this may have on employment, and wants companies to be involved in the training and 'upskilling' of the parent taking leave. CFTC regrets that the funding available for the child benefit section of the social security system has been cut owing to the transfer of the surpluses from 2001 and 2002 to the sickness and old age sections. Lastly, CFTC is against a tax credit being used to fund for-profit crèches, except when employee representatives are involved in their management.

The General Confederation of Labour (Confédération générale du travail, CGT) has also been critical of the opening up of the care of young children to the market. It too is concerned with the effect that paid parental leave might have on women’s employment and equality at the workplace. The union confederation also perceives the promotion of a line of reasoning in which low-cost care is paramount, while it believes that the announcements relating to crèches do not match people’s needs.

The Women’s Rights Collective (Collectif des droits des femmes), which brings together numerous not-for-profit and trade union organisations, has criticised the PAJE, arguing that it amounts to extending the APE to one-child families, which may encourage more mothers, especially those in the most insecure and low-paid work, to pull out of the labour market.

The National Union of Family Associations (Union nationale des associations familiales, UNAF) a body representing voluntary sector and NGO family associations, is pleasantly surprised by the sums announced for the PAJE, considering the financial austerity of the current period. It also notes the progress made toward universal benefits.

Commentary

The government has earmarked some additional resources for family policy in a period otherwise characterised by a high degree of budgetary austerity. To keep the promise made by President Chirac, the government has basically reworked the existing benefits to create the PAJE. Compared with previous policy, the new benefit will be less tightly linked to income, and middle and upper income groups will be subsidised to a greater extent. This policy direction is more 'universalistic' than the tax measures taken by the government in 2002, which were aimed at well-off families (FR0210102N).

The government has adhered to and bolstered its previous policies seeking to promote individual rather than collective forms of childcare, on which the new measures announced are nothing more than promises. In terms of childcare, the government has opened up its subsidies for the first time to the for-profit sector.

By extending paid parental leave to parents with one child and targeting it more strongly on those currently in the labour market, the government risks, or banks on, promoting the withdrawal of some of the most precariously placed employees from the labour market, a trend that has been observed since the extension of the APE to mothers with two children in 1994. Lastly, the government's principal measure has not been publicised - ie a failure to index-link housing and child benefits, or to do so fully, particularly for poorer families. (Antoine Math, IRES)

Page last updated: 25 June, 2003
About this document
  • ID: FR0306105F
  • Author: Antoine Math
  • Country: France
  • Language: EN
  • Publication date: 25-06-2003