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🇫🇷 France /Elections & Politics

Poorly Targeted, Little Incentive: Court of Auditors Recommends Reforming Activity Bonus

From Le Figaro · () French

Translated from French, summarized and contextualized by DistantNews.

At a glance

Analysis Named sources Context piece
  • A French Court of Auditors report recommends reforming the "prime d'activité" (activity bonus).
  • The report suggests ending payments to apprentices and those combining work and retirement, saving over 300 million euros annually.
  • It also proposes better inclusion of part-time workers and incentivizing employment, as the current system has not significantly boosted employment rates.

France's Court of Auditors has called for a significant overhaul of the "prime d'activité," a state benefit designed to support low-income workers and encourage employment. A report presented to the Senate on Wednesday highlights that the bonus, costing nearly 11 billion euros annually, has largely failed to incentivize people to work.

The prime d'activité has largely contributed to eliminating poverty situations for full-time workers.

— Sophie ThibaultPresident of the fifth chamber of the Court of Auditors, explaining the report's findings on the bonus's impact.

The court recommends discontinuing payments to apprentices and individuals who are combining work with retirement benefits. These categories, the report argues, receive no incentive effect from the bonus, and ending their eligibility could save over 300 million euros each year. The current system primarily benefits apprentices earning above 78% of the minimum wage, a situation described as contradictory by some officials.

While the report acknowledges that the prime d'activité has helped reduce poverty for full-time workers, it has not had the same impact on part-time employees. An Ipsos survey of 6,000 people, cited in the report, found that 80% of respondents do not factor the bonus into their employment decisions, possibly due to the difficulty in calculating its exact amount.

This bonus does not play any role in incentivizing employment.

— Sophie ThibaultPresident of the fifth chamber of the Court of Auditors, referring to the ineffectiveness of the bonus for apprentices and those combining work and retirement.

The Court of Auditors proposes alternative measures to enhance the bonus's effectiveness in encouraging people to enter or remain in the workforce. One key suggestion is to disburse the individual bonus from the very first euro earned, a change from the current threshold of 50% of the minimum wage, which would include more part-time workers.

This is a contradiction.

— Arnaud BazinLR Senator and co-rapporteur, commenting on the bonus benefiting apprentices who are already well-compensated.

The report, commissioned by the Senate's finance committee, is the first detailed study on the effects of the prime d'activité since its creation in 2016. It does not, however, address criticisms that the bonus may trap low-wage earners in their current positions.

The best approach is undoubtedly to pay the individual bonus from the first euro.

— Sophie ThibaultPresident of the fifth chamber of the Court of Auditors, proposing a way to increase the bonus's effectiveness.
DistantNews Editorial

Originally published by Le Figaro in French. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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