Impact study of changes in unemployment insurance rules on July 1, 2021

The reform of unemployment insurance compensation, certain measures of which were initially due to enter into force in April 2020, was amended by the decree n ° 2021-346 of March 30, 2021 to respond in particular to the decision of the Council of State of November 25, 2020.

Unédic presents here the rules resulting from the decree and their financial effects as well as the consequences for beneficiaries of unemployment insurance.

The expected effects of the new rules

As of July 1, 2021, new methods of calculating the daily reference wage (SJR) and the duration of compensation will come into force and will apply to new entrants. As a reminder, as provided for in the decree of July 2019, the new calculation method will take into account both the working days and the non-working days during the 24 months preceding the last end of the employment contract. The daily reference wage will thus reflect the average wages received over the period between the first and the last day of employment in the last 24 months. In the event of continuous work during the reference period, the amount of the SJR will remain the same. On the other hand, if the reference period includes periods not worked, the SJR will be reduced.

The decree of March 30 introduces a floor to limit the decrease in the RLS to 43% maximum compared to the method of calculation of the 2017 agreement.

The first year, with the new method of calculating the SJR, 1.15 million beneficiaries will open a right with a lower daily allowance (by 17% on average) than with the rules in force until then, while the theoretical duration of compensation would be 14 months on average, against 11 months with the pre-reform rules. Among these beneficiaries, 365,000 people would have a reduction in allocation limited by the minimum system.

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The minimum membership condition, set at 4 months since August 1, 2020, will increase to 6 months after “return to better fortune”. That is to say after having observed the improvement of the labor market situation according to two economic criteria: the decrease in the number of job seekers registered in category A (without activity) and the increase in the number of prior declarations when hiring (DPAE) contracts of more than one month (excluding temporary work). At the earliest, these conditions could be observed from the end of October 2021 and the measures conditional on this return to better fortune could come into force from the beginning of 2022.

With the change to a minimum of 6 months of membership, 190,000 people would not open a right in the first 12 months following the entry into force of the measure and 285,000 people would see their entitlement delayed, by 5 months on average.

The decree of March 30 also modifies the measure of degression of the allowance, applied to benefit recipients under the age of 57 who received an average salary above 4,500 € gross per month. From July 1, the degression of the allowance will apply after 8 months of compensation, compared to 6 months in the initial version of the decree of July 2019. The count of days compensated before application of the degressivity will be reduced to 6 months when the return to better fortune clauses are met.

The count of days compensated has been suspended since March 2020 and will be reset to 0 for all beneficiaries on July 1, 2021. Also, will the degressivity measure produce its first effects from March 2022. Between March and June 2022, 35,000 people would be affected and 25,000 in the second half of 2022.

The financial effects of the reform

Once all the measures have been loaded, the reform would lead to lower expenditure of € 2.3 billion per year. The financial effects expected for 2022 are conditioned on the date of return to better fortune. If the degressivity measures and the minimum membership condition of 6 months on January 1, 2022 are applied, the least expenditure would amount to € 1.9 billion; if these measures are applied beyond 2022, the least expenditure would be € 1.2 billion.

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