Unemployment Insurance Reform: These Benefit Rules Could Be Relaxed in 2024

The text foresees austerity measures… but also new rights for job seekers. This Friday, November 10, trade unions and employers’ organizations reached an agreement on the future unemployment benefit rules, which must apply from January 1, 2024. If this text – which must now be confirmed by the government to enter into force – works reduction of benefits for the unemployed due to the new method of calculationit also provides for certain improvements to jobseeker’s allowances.

Agreement it softens in particular, the three main components of the first unemployment insurance reform implemented under Emmanuel Macron. So, “in order to take into account and limit certain effects of the reform implemented in 2019 and implemented from 2021 on the most vulnerable groups (…), while keeping their goal of encouraging a return to employment sustainable, the signatories of this memorandum of understanding agree to adapt the rules which refer to the conditions for the acquisition of rights and the calculation of compensation.explains the text.

Less strict conditions for opening a new right to unemployment

In more detail, the social partners propose lowering it to five months of work during the last 24 months (ie 108 working days or 758 hours) the threshold imposed on jobseekers to open a new unemployment right. As a reminder, from December 1, 2021, you must work for six months out of the last 24 to be able to receive benefits from the Pôle emploi, compared to just four months previously. Please note that this easing of the conditions for opening a new right would only apply to registered for the first time on the labor market – that is, people who have never received compensation from Pôle emploi -, as well as on seasonal workers. The minimum benefit duration, currently set at six months, would therefore increase to five for these two groups. The measure would cost money 500 million euros into the unemployment insurance system between 2024 and 2027.

Another parameter of the previous reform that the social partners want to change is the reduction of unemployment benefits for individual jobseekers. Entering into force in July 2021, this measure initially consisted of reducing, from the ninth month of the benefit, the amount of unemployment benefit paid to jobseekers of the age under 57 years old on the contract expiry date and who received gross monthly salary greater than 4,500 euros. And by 30% at most. This system was then tightened on December 1, 2021, and the degression applies today from the seventh month of remuneration.

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Fewer jobseekers affected by benefit cuts

Without returning to the period after which the degression of unemployment benefits is applied, the social partners want to play on the age limit of the measure for “better take into account the reality of employment situations and the ability of older jobseekers to find work quickly and sustainably”, they write in their agreement. Trade unions and employers’ associations therefore propose that the goal of degression be limited only to age beneficiaries under 55 years old. If the government confirms the social partners’ agreement, jobseekers aged 55 to 57 could once again use their unemployment benefits without a reduction. A reservation that would represent a cost of 65 million euros between 2024 and 2027

The method of calculating unemployment benefits has become more flexible

The text agreed upon by the trade unions and employers’ organizations foresees, in addition, relax the formula for calculating the daily reference wage (SJR), which serves as the basis for determining the amount of compensation during unemployment. Because from October 1, 2021 the calculation method has been tightened, leading to reduced rights for many job seekers. Indeed, from now on it is average monthly income income in a period of 24 or 36 months, which is taken into account when calculating the unemployment benefit. Which comes down to integration periods of inactivity. Unfavorable method of calculation for jobseekers because before this reform, only days worked were taken into account.

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For limit the fall the rights of the jobseekers in question – mainly “permittees”, those precarious workers who alternate short contracts with periods of unemployment – the government has, however, provided (little) protection. That’s how the ceiling was installed 75% limit the number of non-working days that can be taken into account when calculating SJR, and thus the amount of unemployment benefits. This means that for 100 days worked in the reference period, it is not possible to keep more than 75 additional non-working days. In order to increase the level of SJR, and thus the amount of benefits for the unemployed, the social partners want to reduce this upper limit to 70%. Relaxation that would cost money 130 million euros into the unemployment insurance system between 2024 and 2027.

It remains to be seen whether the executive will confirm these various measures. Because Matignon imposed a very limited framework social partners for negotiations regarding the future agreement on unemployment insurance. The text supported by employers’ and employees’ associations is in revision by the government, and the latter has not yet specified when it will make a decision on the subject.