Unemployment insurance: here are the biggest losers of the first reform

A welcome study, while the government intends to apply its new reform of unemployment insurance on February 1 by reducing the duration of compensation by 25% for all new entrants at Pôle Emploi. In mid-December, Unédic – the body responsible for the management of the unemployment insurance scheme – revealed an analysis of the first reform fully operational since 2021. The flagship measure of this reform, namely the new calculation of unemployment benefits, entered into force on October 1, 2021. On December 1 of the same year, two other aspects of the reform were applied: tightened conditions for opening a new right and a degressivity of benefits at the end of the seventh month of compensation for certain job seekers.

>> Our service – A question? lawsuits? A specialized lawyer (labour, real estate, family law, etc.) accompanies you by telephone

These three initiatives have been scrutinized by Unédic. But with a certain limit: the results regarding the first half of 2022, and thus the very first months of the implementation of the 2021 reform, the analyzed systems are not yet fully loaded. “Since behavior potentially takes several months to adapt, changes in behavior are not necessarily observed in the short term. Their estimates will require more hindsight”, explains Unédic in his study.

According to the organization’s estimates, by the end of June 2022, 620,000 beneficiaries were compensated under the new rules introduced during 2021, i.e. 29% of the total number of job seekers compensated in the same month (more than 2 million). But the share of unemployment benefit recipients fell significantly with the 2021 reform. Still, according to Unédic, the share of jobseekers (categories A, B and C) entitled to unemployment benefit fell from 59% in the first half of 2019 – the last comparable period excluding the health crisis and pre-reform – to 57.2% over the first six months of 2022 (-1.8 points). A decrease which mainly affected women (-2.5 points in the period), those under 25 (-3.4 points) and the least qualified (-3 points for those under 35 who have a diploma level lower than the matriculation exam) . And the share of job seekers actually receiving compensation also fell from 40.4% in December 2021 to 36.6% in June 2022.

ALSO READ

Pensions, unemployment insurance, energy: the calendar of reforms coming in early 2023

With this reform – and the next one coming on February 1 – “the government is curtailing the rights and targeting the insecure […] without any positive effect on employment!”, laments the CGT in a press release. Here is the profile of the job seekers most affected by the previous unemployment insurance reform.

20% fewer rights with the new conditions for access to unemployment insurance

Since 1 December 2021, you must have worked six months – and no longer four – during the last 24 months to open a new right to unemployment insurance. According to Unédic, 135,700 jobseekers opened a new right in June 2022 against 169,100 in June 2019. A decrease of 20%.

Unsurprisingly, it is younger jobseekers and those leaving short contracts who are hit hardest by this measure. If all age groups have been affected (see table below), the biggest losers are beneficiaries under the age of 25 with only 24,100 entitlements in June 2022 compared to 32,000 in June 2019, i.e. a decrease of 26% in the period. In terms of status, it is mainly non-directors who bear the burden of the reform (-21% of openings for rights, against -5% for directors). Finally, depending on the type of contract, former temporary workers and employees on fixed-term contracts are affected.

Broken down by sector, a sharp decrease in the number of entitlements of former employees in agriculture, forestry and fisheries was observed (-30% between the first half of 2019 and the same period in 2022). Jobseekers who have worked in accommodation and catering or in arts and entertainment are slightly less affected (-22% in each sector). It should be noted that for former employees in the production and distribution of electricity and the extractive industry, Unédic has not observed any change in the right to unemployment insurance.

The new calculation method has reduced unemployment benefits by 16%

With the entry into force of 1 October 2021, the new method for calculating unemployment benefit no longer only takes into account the days worked, as was the case previously, but the average monthly income that the jobseeker has received over the last 24 months. Periods of inactivity are therefore now included in the calculation of daily allowance, which can therefore lower the amount of the latter. A measure that has been presented from the start as a criminalization of “permissions”, precarious workers who alternate between short contracts and periods of unemployment.

This is confirmed by the Unédic study. According to the organization, the biggest losers are job seekers who come out of a temporary assignment: those affected by the 2021 reform have experienced that the amount of their initial daily allowance (before payment of supplementary pension contributions and social contributions) has decreased by around 14% per average. It has fallen by almost 10% in connection with fixed-term contracts and those under 25 years.

ALSO READ

Reform of unemployment insurance: in this case, the duration of compensation will be reduced by 40%

More generally, “beneficiaries affected by the 2021 reform have, on average […] a daily allowance lower by 16% compared to what they would have received under the old rules”, emphasizes Unédic. A development that is limited by the neutralization of periods of imprisonment in the calculation of unemployment rights and which is likely to increase in the future.

For almost half of the new beneficiaries, the benefit amount in detail was not affected by the 2021 reform. But for 30% of them, unemployment benefits are more than 10% lower. % compared to what it would have been without the redo rule. And 20% of the recipients receive unemployment benefit, the amount of which is 1 to 10% lower than what they could have received without the reform.

Another negative effect of the flagship measure of the first reform: during the first six months of 2022, 40% of beneficiaries opened a right with an initial unemployment benefit lower than the minimum benefit of 29.6 euros, against 27% “only” in 2019. For 11% of beneficiaries, the daily allowance received is lower than the basic RSA (19 euros per day) in the first half of 2022, compared to 7% in 2019.

More than 50,000 recipients have already been affected by the reduction in unemployment benefits

The degressivity of the subsidies concerns beneficiaries under the age of 57 on the date of expiry of their employment contract and who have received a salary of more than 4,500 euros gross per month as part of their activity. It is therefore mainly managers who are targeted for this measure, which provides a maximum reduction of 30% in unemployment benefits to the jobseekers in question. For those registered between 1 July and 1 December 2021, degressivity applied from the ninth compensation month. The first effects were therefore observed from March 2022. Since 1 December 2021, degressivity applies from the seventh compensation month. The first effects of the second phase of this reform were therefore observed from June 2022.

In March 2022, 26,000 beneficiaries saw their benefits fall due to degressivity, according to Unédic’s estimates. In June, 30,700 new recipients received a decreasing supplement, and “52,000 others could see their unemployment benefit decrease in the coming months”, according to the organization responsible for the administration of the unemployment fund.

ALSO READ

Inflation, growth, unemployment… the gloomy forecasts for 2023 and the reasons for hope

Initially, the 30,700 jobseekers affected by the degressivity in June 2022 were entitled to an average daily allowance of 126 euros. With degressivity, this amount rose to 98 euros. Among these beneficiaries, 12,500 had a reduction in their benefit of 30%, 7,300 experienced a reduction in their benefit of between 15 and 30% and 10,900 of “only” 15%.

Given the population targeted by this measure (69% of managers), the profile of the most penalized beneficiaries is again not surprising. It is mainly men (69%) who are affected by degressivity. People over 35 (36% are between 35 and 44 and 43% between 45 and 56) and the highest qualifications (40% of bac+5 and above) are also the most affected. “Often they (the jobseekers affected by the degressivity, editor’s note) performed IT activities, financial, real estate or insurance activities, scientific, legal, accounting, managerial, architectural, d’engineering, control or technical analyse’, explains Unédic.

Leave a Comment

%d bloggers like this: