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Everything that changes in France from January 2019

January is often a time for change and there are several new laws and price hikes coming into existence that will affect life in France.

Everything that changes in France from January 2019
Photos: AFP
Here are the main ones you need to know about.
 
Minimum wage
 
From January 1st, France's minimum wage or Smic as it's called in French, is set to increase by 1.5 percent. 
 
That means that anyone earning the minimum wage will be earning €10.03 euros on 1 January 2019 instead of €9.88 — the value of the minimum wage since January 1st 2018. 
 
This equates to €1,521.22 per month on the basis of the legal working week of 35 hours. 
 
Photo: AFP
 
CSG “social charges”
 
The French government announced in December that from 2019 pensioners receiving less than  €2,000 per month will be exempt from the rise in the cost of the CSG “social charges” that came into effect in 2018. 
 
The move came about as a result of demands made by the “yellow vests” and means that retirees that fall into the right pay bracket will pay the previous rate of 6.6 percent compared to the 8.3 percent which they paid after the increase.
 
While the exemption won't come into effect officially until the second half of the year, the pensioners concerned will receive a back payment to cover the first six months of the year. 
 
But it isn't all good news for retirees…
 
READ ALSO:
Photo: AFP
 
Pensions
 
Pensions are set to go up by just 0.3 percent from January, well below inflation which sits at around 1.8 percent. 
 
However the government has increased the solidarity allowance for the elderly by €35 per month, bringing it up to €826.20.  
 
Taxe d'habitation
 
The government's plan to phase out the residence tax called the taxe d'habitation saw many households in France better off in 2018.
 
And in 2019, the measure should be even more noticeable, with a further 30 percent drop before it is completely abolished in 2020. 
 
Photo: AFP

 
Overtime
 
From January 1st 2019, the money earned by working overtime will be exempt from tax. 
 
This move, which was initially set to take effect from September 2019, has been moved forward. 
 
All employees, including civil servants, will benefit from this scheme. 
 
Income tax
 
The French government is pushing ahead with the long-planned reform to deduct income tax directly from workers' paychecks on a monthly basis from January 2019.
 
 
Q&A: What the big change to income tax in France means for you
Photo: AFP
 
Gas prices 
 
Gas prices will fall on average by 1.9 percent on January 1st.
 
The drop will be 0.6 percent for those who use gas for cooking, 1.2 percent for those who use gas for cooking and heating water and 2 percent for homes which are also heated by gas.
 
This drop, is the second consecutive drop after the 2.4 percent decline in December, and can be explained by the decline in gas prices on the wholesale market.
 
These two months of price drops come after a period of steep price increases (+ 5.8 percent in November, + 3.25 percent in October, + 0.9 percent in September).
 
 
Electricity rates
 
But the bad news is that electricity prices are set to rise in 2019, according to Le Parisien, and possibly by more than 2.3 percent. 
 
Uninsured drivers 
 
If you're one of the hundreds of thousands of uninsured motorists in France, beware.
 
From January 1st, the French police will have access to files that make it easier for them to detect uninsured vehicles on the road.
 
Motorists driving without insurance face fines of up to €3,750 which can be accompanied by additional penalties such as the suspension or cancellation of a license and even the confiscation of the vehicle.
 
These are the days to avoid driving on roads in France this summer

 
Cigarettes
 
There's some bad news for smokers in 2019. 
 
After the two price hikes seen in 2018, two more are scheduled for April and November next year, with prices going up 50 centimes each time.
 
That means that the average price of a packet of cigarettes will be around €9 at the end of 2019. 
 
Salaries
 
Salaries should continue to rise in France next year, according to a study by Deloitte.
 
The report reveals that companies expect earnings to rise between 1.5 percent and 2.5 percent in 2019 as part of annual wage negotiations. 
 
Stamp prices 
 
From January 1st the price of stamps is set to rise, with rates increasing by about 10 percent. 

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HEALTH

Mutuelles: Why is French health insurance getting more expensive?

France’s top-up health insurance 'mutuelles' have been getting steadily more expensive in 2020. Here’s a look at what’s changing, why and who is the worst affected.

Mutuelles: Why is French health insurance getting more expensive?
A dentist is checking the teeth of an elderly lady in a nursing home in Paris. Photo: AFP

“The prices have never been so high in France,” said Fabien Soccio, spokesperson for the company Meilleure Assurance (Best Insurance).

His company this week revealed the results of a new study of France's private health insurance fees, mutuelles, to French media.

After comparing 55 different mutuelles health insurances, Meilleur Assurance concluded that there had been a general spike in the average cost.

What is a mutuelle?

France has generous state health care that covers a lot of medical expenses, but not all costs are reimbursed.

In France you pay upfront for your doctor's appointment, prescription or procedure and then the government reimburses the costs to you. Depending on the procedure and your situation, usually about 80-90 percent of the cost is reimbursed.

If that cost is a €25 appointment with your GP that's not such a big deal, but with more expensive treatments the costs can mount up, which is where a mutuelle comes in.

The mutuelle is a 'top-up' insurance – not obligatory, but recommended – which covers extra costs that are not covered by the state. How much a mutuelle covers will depend on the kind of insurance, where you live and the expenses in question.

If you are an employee, your employer must pay for at least half the cost of your mutuelle

Who was affected by the price increase?

The 2020 price hike touched the country as a whole, however some regions and population groups were harder hit than others, Soccio told Le Parisien.

To compare the costs for different socio-demographic groups, Meilleur Assurance created three different types of profiles; a 25-year-old employee with a “classic” mutuelle; a couple with two children, also on a “classic” mutuelle and a 60-year-old couple with “strengthened” guarantees in their mutuelle.

Seniors hardest hit

Retirees tend to go for fuller versions of mutuelles because these cover additional costs (such as dental and optical treatments). 

Seniors on extensive types of mutuelles were those suffering the steepest price increases this year, Soccio said. 

“In 2020, fifteen départements exceeded a threshold of €3,000 in annual fees for a senior couple with extra guarantees,” Soccio said.

“That’s an average increase of more than €176 in one year,” he said.

For the couple with a child, the increase was slighter ( an extra 4 percent), whereas the young employee saw health insurance bills largely unchanged.

READ ALSO Brexit: Do I need a mutuelle to get residency in France?

 

.. along with Parisians

The study also revealed large price differences between different regions, with inhabitants in the Paris region Ile-de-France paying the highest bills for their mutuelles.

A retired couple would pay on average €528 more if they lived in Paris compared to if they lived in a more rural, cheaper département like Mayenne.

Similarly, employees would pay 30 percent more on average in Paris than in Pays-de-la-Loire.

Parisians also saw the steepest price increases since last year, by 14.6 percent on average for the retired couple with a mutuelle covering extra costs.

On a national level, the average price increase for the same couple was 12.1 percent. 

.. but everyone was a little worse off

However the country as a whole saw a price increase last year, with even those opting for the cheapest kinds of health insurance affected by the general price hike.

In one year, from 2019 to 2020, the cheapest type of health insurance had increased by 13.7 percent, according to the study. 

Why the increase?

Prices generally increase a little every year, but this year was unusual, Soccio said.

“Today, we are in an uncertain and troubled situation,” he told Europe 1, listing several factors that had contributed to the price increase: the Covid-19 pandemic, the government's new health reform known as “100 percent Santé”, and a new health tax known as the “Covid surtax”.

When the French government presented their new budget for 2021, centred on their dazzling €100 billion relaunch plan, they promised not to increase taxes for the French. Instead, to top up their savings a little, the government introduced a new tax, the “Covid surtax”, which will be paid through the mutuelles and other health insurance companies.

This tax will provide €1 billion in total to the state in 2021, and €500 million in 2022, according to French media.

What about the future?

Soccio said he worried the trend of prices increasing would continue in the next couple of years, leading to steep prices for even those opting for the cheaper mutuelles.

“It's safe to bet that the national average costs will pass €3,000 in the next two years,” he told Le Parisien.

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