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Economy

France's family allowance not universal any more

media President Francois Hollande and Social Affairs Minister Marisol Touraine, 16 October 2014. Reuters/Eric Feferberg/Pool

The French government has stopped family allowance payments to the better-off, ending a universal system that has lasted for over 70 years.

Since its incepition in the 1940s, the French family allowance system has been universal, available to all regardless of income.

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Initially created to ramp up the birth rate, it has recently been targeted by the Socialist government as partof its efforts to reduce the budget deficit to levels set by European Union guidleines.

The move, which should take effect on July 2015 and affect 12 per cent of French families, is expected to save 700 million euros per year.

But it has attracted criticism from both left and right.

"It's pure improvisation, the minister of social affairs declared the exact opposite weeks ago,"  Eric Woerth, who was economy minister under Nicolas Sarkozy's presidency, told RTL radio.

He accused the government of "stigmatising" the family. 

"It's not a social redistribution measure because the 700-million-euro savings will be used to pay the Responsability Pact [ with business ]," said on Friday the head of the Communist Party leader Pierre Laurent told RFI.

"I think it's right that wealthier people contribute more to the welfare system," said the head of the Green party, EELV, Emmanuelle Cosse on France Info radio. "But I regret that the government has not had the courage to engage real reforms (...) it's just a tiny bit of fiscal tinkering."

The CGT trade union condemned an "unprecendented" attack on "universality".

Currently the French welfare system gives 127 euros a month to any family with two or more children.

The change will halve the allowance to families whose incomes are over 6,000 euros a month and divide it by four for those on more than 8,000 euros. 

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