Three ways for the government to cut costs

To improve Unedic’s account, the executive has three levers: extending the minimum contribution period to avail the allowance, reducing the repayment period and questioning the specific terms given to seniors.

Gabriel Ettel brought together his ministers in Matignon this Wednesday morning to discuss with him, among other things, the new reform of unemployment insurance. Officially, the aim is to ensure that more French people work there. But it is clearly also a question of saving, which is the government’s absolute priority in restoring the public accounts. Because of this, even if the rules for unemployment compensation are already tightened in 2023, the government intends to impose a new turn of the screw, which is the only way to further reduce the level of EU spending.

For the record, since last year, what we call the eligibility period in administrative parlance, in other words, the minimum contribution period to be entitled to unemployment benefits has increased to 130 days. To qualify for ARE, you must have worked for approximately 6 months during the last two years prior to your registration with France Travel, with the exception of unemployed people over the age of 53 for whom the six months of contributions count for one more. The second turn of the screw in the year 2023 was related to the maximum period of compensation which increased to 18 months, except for seniors.

Extending the minimum contribution period will have an immediate financial impact

So what options are being considered at this stage? The first option would be to extend the eligibility period to reduce the number of new people registered with France Travel. This objective is based on the assumption that employees are tempted to “become unemployed” after a fixed-term contract or a temporary assignment after accumulating the required six months. Extending this minimum contribution period to eight, nine or even twelve months would immediately reduce costs.

Another option: reduce the payback period. The result is a fairly mechanical reduction in the number of jobseekers receiving unemployment benefits and therefore lower costs for Unedic. Even if the objective is to reduce costs quickly, this option presents a drawback: its effects will not be immediate.

Difficult to penalize only senior unemployed people

As for the third option, it is being widely discussed. This would include tightening reservation conditions for unemployed seniors. With the same objective of reducing the number of job seekers still receiving unemployment benefits. But, this time, a result that will be progressive on a financial level, knowing that in recent years, “in-kind” compensation for the elderly unemployed has increased the most.

Of course, it can be all three options simultaneously. It is also hard to imagine that it is only the third option that is chosen when with the pension reform, unemployed seniors have to wait longer before asserting their retirement rights. And in our neighborhoods, unemployed seniors are not subject to the same rules as other job seekers.