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

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

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.