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MONEY

What are France’s ‘Christmas bonuses’ and could you qualify?

Each Christmas France hands out "primes" or bonuses to poorer families around the country. But who qualifies and how much are they worth?

French protestors hold a sign bearing the word 'solidarité' - a key concept in the country's national identity.
French protestors hold a sign bearing the word 'solidarité' - a key concept in the country's national identity. (Photo by DENIS CHARLET / AFP)

The word solidarité is everywhere in France. 

It denotes the moral obligation that we have as a society to help each other out – particularly the most vulnerable. 

The concept was coined in the Encyclopédie of Denis Diderot, a great 18th century work famous for embodying the thought of the Enlightenment period. It was later introduced into Napoleon’s legal code.

Today, France has a Ministry of Solidarity and Health. And a civil partnership in France is known as a Civil Pact of Solidarity. There are dozens if not hundreds of French NGOs with solidarité in their name.

Sperm donations in France have been described as an intimate act of solidarité. And we have lost count of how many times French President Emmanuel Macron and Prime Minister Jean Castex have called for the population to show solidarité by getting vaccinated and wearing masks. 

So it should come as no surprise that the French state offers payments to the country’s poorest households over Christmas – a sure act of solidarité.

The Christmas bonus 

If you are already receiving welfare payments as a low-income household (these would be RSA, ASS or AER), through CAF or MSA, you can also expect to receive extra money, as part of a so-called ‘Christmas bonus’ around the middle of the month – 15th December at the earliest.

As a single beneficiary you will receive €154.52; as a couple or parent you will receive €228.67; and as a household of three people, the one-off ‘bonus’ rises to €274.41. For larger households, there is an extra €60 paid out per additional child. 

READ ALSO How to receive CAF payments in France

If you are already receiving the aforementioned CAF or MSA payments, there is no need to apply. Payment is automatic and the money is not taxable, meaning you do not have to declare it at the end of the year. 

After protests from unemployed people, Lionel Jospin’s government introduced the Christmas bonus in 1998, in a bid to help people already receiving state benefits. No French government, left-wing or right-wing has dared to scrap it since.

In 2020 it was given to more than 2.5 million households. 

The energy cheque 

Close to 6 million French households will receive grants worth €100 to help offset energy bills. These payments will be made between December 13-22nd and are designed to help poorer households cope with the winter cold

Throughout the entire month of December, there will be no hike on gas prices, with tariffs fixed at the same rate as on October 1st. This is part of the government’s strategy  

We have written our own guide to help you save money on energy bills in France. You can read it here

The inflation bonus

People earning less than €2,000 post-tax each month will receive an indemnité inflation in their pay-check at the end of the month. Employers are legally obliged to transfer €100, to help offset inflation experienced in France towards the end of 2021. Some 38 million people will receive the bonus this year. 

Civil servants, job-seekers and students benefiting from French state-backed loans will have to wait until January to receive the bonus, while pensioners will have to wait until February. 

Unlike the Christmas bonus, this is not paid out every year.

The government has described it as an “emergency measure motivated by observed price rises”. The payment is designed to boost purchasing power among the population. The idea is that modest households will spend the money on goods and services, which in turn boosts economic growth. It rests on the macroeconomic assumption that poorer people spend a greater proportion of their money than rich people, who tend to hoard it. 

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MONEY

EXPLAINED: How your French pension works

If you're working in France you will see a chunk of money diverted from your income every month towards a pension - but how does the French pension system work and what do you need to do to ensure that you get your money when you retire?

EXPLAINED: How your French pension works

If you work in France, it’s a good idea to have at least a basic understanding of how the – typically complicated – French pensions system works. This is especially true if, like many readers of The Local, you’ve previously worked and contributed to a pension in other countries.

Emmanuel Macron is trying to reform the French pension system, declaring it too complex and labyrinthine. After writing this guide, we’re inclined to agree to with him.

Exactly what changes he manages to bring in remains to be seen, but here’s how the system works at present.

READ ALSO French pensions: What does Macron want to change?

The basics

There are three pillars to the French pension system: state pension, compulsory supplementary pension, and voluntary private pensions. All employees and their companies contribute to two of them. The third is a personal additional choice.

State Pension

Anyone in employment in France is obliged to be enrolled in a pension scheme.

The régime de base is the basic state pension and the amount to which you are entitled is based on how long you have paid into the system. 

This is divided into trimestres (quarters). There are, obviously, four quarters in a year. A 40-year working career earns 160 trimestres towards your state pension. 

The actual amount you receive depends on average annual income, calculated using the best 25 years of your earning career. But to qualify for a full pension, you need to work longer.

How many trimestres you need to retire on a full state pension depends on the year you were born. Those born between 1961 and 1963 – who are now looking forward to retirement – need 168 trimestres, or 42 years. Those born in 1973 or after currently need 172 trimestres, or 43 years.

Periods of unemployment, maternity leave or absence because of long-term illness or accidents at work are taken into account. These credits count towards determining your total number of trimestres.

This video – in French – explains the trimestres system.

It’s important to note that anyone who has worked for 10 years in France is entitled to claim a state pension. 

Compulsory supplementary pension

AKA – the régime complémentaire. This pension, received alongside the basic pension, is calculated on the contributions paid by an employee during the course of their career.

As the name suggests, paying into this scheme – like the basic State pension – is compulsory. You don’t get to choose which compulsory pension scheme you join, there are national schemes for different jobs and the one you pay into depends on the job you do. This pension is based on your average payments across your working career – not just on the best 25 years.

Not only the employee but the employer contributes towards your pension – something to keep in mind if you intend to hire staff. Pension contributions made by the employee and the employer should be clearly identified on payslips.

READ ALSO How to understand your French payslip

Non-French pensions

Periods of employment outside France may be combined with years worked in France to boost or qualify for French basic and supplementary pensions.

Working in EU/EEA countries, and Switzerland can count to a French pension. Other countries – listed here – also have social security agreements with France that will allow you to combine work periods.

If you’re British and you lived in France before December 31st 2020 (ie if you’re covered by the Withdrawal Agreement) your pension is calculated in the same way as for EU/EEA countries.

A few countries – listed here – have agreements with France for self-employed workers.

READ ALSO Brits in France: What you need to know about your pension

Voluntary private pension

This speaks for itself. You can, if you wish and if you can, pay into a private pension plan.

READ ALSO Ask the expert: How to avoid pension scams when you retire to France

These are less common in France than in some other countries, because the state and complementary pensions are relatively generous. There’s also a legal minimum that pensioners can receive – regularly revised and pegged to the minimum wave – although not all foreigners are entitled to this if they haven’t worked in France for the qualifying period.

Taking advice from a financial adviser is always recommended before investing in financial products.

Overseas pension

If you have retired to France you can of course still claim your pension from the country you were working in. In most cases this will be paid in the currency of your home country, so if isn’t the euro bear in mind that fluctuations in exchange rates will affect how much money you get each month.

And if you’re Australian beware the ‘pensions trap’ resulting from the lack of an international social security agreement – full details here.

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