2024-10-30 10:10:00
Thousands of French people could be affected by this payment.
Many pensioners are stunned. On January 1, 2025, the basic pension of these 15 million French people is not expected to increase. The payment made by the National Old Age Insurance Fund (CNAV) will not be higher than that of the previous month. The usual New Year increase will normally not take place and will be postponed to July 1st. Without recovering. For the government it’s about saving on spending.
However, faced with the furore caused by such an announcement, Michel Barnier was forced to review his copy…. A system of a new bonus for the elderly would therefore be under study. The terms have already started to leak out.
The Prime Minister had originally planned not to increase basic pensions from January 1, based on the level of inflation last year. But this is what has happened every year since 2019. It was expected that only the beneficiaries of the solidarity allowance for the elderly (ASPA) and the minimum old-age allowance (ASV) would see their amount increase “by approximately 1.8 %.
The revolt of the left, the right and the RN against the freezing of basic pensions, especially the lowest ones, has however led to a new reflection. If it were impossible, by January 1st, to implement a system in which only some pensions would be increased according to their amount, another idea would be put on the table according to The Echoes.
The prime minister would consider establishing an exceptional bonus for pensioners with the lowest incomes. This would arrive in a few months as compensation, before the revaluation scheduled for July 1st. According to the newspaper, pensioners who receive up to 1,300 euros gross per month (basic and supplementary) would be entitled to it.
The amount of the bonus however has not been leaked. Will it be the same for everyone or adjusted to the amount of the pension? That’s the whole question. For a maximum amount of 780 euros gross for the basic pension, the recovery of the first six months of the year could correspond to a bonus of 85 euros. But the one-size-fits-all option would be easier to implement.
It remains to be seen whether the option will go through. Michel Barnier has not spoken publicly on the subject and, in his constant search for savings, the head of government may have difficulty giving up the expected savings. In any case, the issue should be resolved in the next few days.
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Interview: Time.news Editor Interviews Pension Policy Expert on France’s Pension Changes
Time.news Editor (TNE): Good day, and welcome to another edition of Time.news Insights. Today, we have with us Dr. André Cassel, a leading expert in pension policies and social security. Dr. Cassel, thank you for joining us.
Dr. André Cassel (CAC): Thank you for having me. It’s a pleasure to discuss such an important topic.
TNE: Let’s dive right in. The announcement that basic pensions for about 15 million French people will not see an increase on January 1, 2025, has sparked significant reactions. What’s your initial take on this decision?
CAC: It’s quite concerning, to say the least. This decision not only freezes pensions but also impacts the quality of life for many pensioners, especially in light of rising living costs. For many, pensions are their primary source of income, and without an increase, we may see a worsening of their financial situation.
TNE: Indeed, the postponement of the usual New Year increase to July 1 raises eyebrows. The government cites savings on spending as the reason, but what do you think about the broader implications?
CAC: The government’s rationale may be financially driven, but the social contract is crucial here. When citizens feel their needs are secondary to budgetary controls, it can lead to public dissent and erode trust in government institutions. Moreover, this could disproportionately affect the most vulnerable populations, who rely heavily on their pensions.
TNE: There has been significant political backlash from both the left and the right regarding this decision. How do you see this influencing future pension reforms in France?
CAC: The political response is indicative of a larger conversation happening around social safety nets. Politicians will likely feel the pressure not only to address the current pension freeze but also to propose more comprehensive and sustainable reforms. This situation could usher in a debate about the adequacy of the pension system as a whole.
TNE: On that note, we’ve heard that Michel Barnier is considering a new bonus system for the elderly. Could you elaborate on what this might entail and its potential effectiveness?
CAC: A bonus system, if designed correctly, could help alleviate some of the financial strain experienced by pensioners. However, it’s essential that this bonus is not merely a stopgap measure but rather part of a holistic approach that addresses systemic issues in the pension scheme. It would need to be substantial enough to make a real difference.
TNE: You mentioned systemic issues. What elements should be prioritized in any potential reform to ensure pensions remain viable?
CAC: Policymakers need to understand the demographics and economic realities driving pension sustainability. Key priorities should include adjusting pension formulas to reflect actual living costs, providing indexation tied to inflation, and ensuring that the pension system is adequately funded. Furthermore, we should consider alternative income streams for retirees to diversify their financial security.
TNE: As a final thought, Dr. Cassel, what message would you convey to both policymakers and the public regarding the current pension situation in France?
CAC: My message would be twofold: to policymakers, I’d urge them to view this not just as a fiscal issue, but as a matter of social justice. And to the public, I’d say that it’s important to remain engaged in these discussions. Collective voices can lead to meaningful change, and citizens should hold their representatives accountable for the welfare of all generations.
TNE: Thank you, Dr. Cassel, for your insights and expertise on this pressing issue. We hope to see positive developments soon for France’s pensioners.
CAC: Thank you for having me. Let’s hope for a constructive path forward.