Minimum income scheme reform adopted

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On 1 January 2004, legislation came into force in France introducing a new 'minimum employment income' (RMA) scheme and decentralising the existing 'minimum integration income' (RMI) benefit and assistance programme for people facing labour market difficulties.

A law introducing a new 'minimum employment income' (revenu minimum d’activité, RMA) scheme and decentralising the existing 'minimum integration income' (revenu minimum d’insertion, RMI) was passed by parliament on 10 December 2003 and came into force on 1 January 2004. The RMI scheme was introduced in 1988 (FR0007174N) and aims to help reintegrate those facing difficulties into the workforce, by providing financial assistance to those whose income fall below a minimum amount, together with concrete assistance in the shape of an 'integration contract'. The reform of the RMI was initiated by the government with the objective of reversing the perceived trend towards a lack of initiative on the part of RMI recipients, by prioritising their return to work (FR0306103F). It comprises two strands: the establishment of a new state-funded RMA contract and the decentralisation of the RMI.

A new 'minimum employment income integration contract' (contrat d’insertion-revenu minimum d’activité, RMA) is aimed exclusively at RMI recipients encountering particular difficulties in finding employment. Executive orders implementing the new scheme should open access to the contract for those who have been receiving the RMI for at least 12 months. The contract is for a minimum of 20 hours' employment per week over a maximum 18-month period. The income, equal to at least the hourly rate of the SMIC national minimum wage, will be paid out by the employer, to which the RMI funds will be paid directly. An RMA recipient who works 20 hours per week will thus receive EUR 545 per month, which is EUR 183 more than the RMI. Social security contributions will be levied only on top-up pay awarded by the employer. The recipients of the RMA will thus receive only partial social security cover, excluding unemployment and retirement cover. On this point, the government dismissed an amendment tabled by MP Christine Boutin - despite the fact that she is a member of the governing conservative Union for the People's Movement (Union pour un mouvement populaire, UMP) and the bill’s sponsor - which aimed to grant full social security cover to RMA recipients (thus including unemployment and retirement benefits). The government hopes that a large number of RMA contracts will be set up in 2004, as its declared medium-term goal is to reach one third of the 1 million currently registered RMI recipients.

Previously, the management of the RMI scheme was split between the central state, responsible for the benefit, and the local départements, responsible for recipients’ integration into the workforce. From 1 January 2004, the reform gives départements the responsibility for decisions regarding admissions to the RMI, monitoring the criteria for benefit payment and insuring integration into the workforce. On the other hand, the level of the RMI and its general eligibility criteria are still set nationally. Moreover, and after much wavering, the new law retained, albeit for a transitional phase, the obligation on regional authorities to devote the equivalent of 17% of the amount spent on the RMI to actions aimed at integration into the workforce. The organisation of the départemental supervision of recipients’ integration into the workforce has been modified in order to introduce an obligation to inform recipients about their rights (access to financial benefits) and duties (registering in an integration scheme that must eventually lead to a job) - a principle that applies to all job seekers. It fits more generally into the European employment strategy, which invites EU Member States to channel employment-related programme funding into employment-oriented activities.

The debates surrounding the new law were marked by the left-wing opposition’s opposition to the scheme and, more unexpectedly, by the position adopted by the bill’s sponsor, Ms Boutin, despite the fact that she is a member of the current governing party. For sometimes different reasons, the trade unions, along with non-governmental organisations dealing with integration into the workforce, have also greeted this reform with many reservations.