New regulation targets illicit income

A new regulation signed on October 19, 2026, by Vincent Jeanbrun and Gérald Darmanin allows for the deduction of social benefits from revenues derived from illegal activities such as looting, drug trafficking, counterfeiting, and tobacco smuggling. This measure aims to financially penalize individuals involved in these activities, but it may also push vulnerable households toward the underground economy.

Social benefits affected by the rule

The regulation affects four types of social benefits: the active solidarity income (RSA), unemployment benefits, personal housing allowances (APL), and family allowances. These benefits provide crucial financial support to low-income households, with the RSA offering up to 646.25 euros per month for a single person in 2026.

Deduction of illicit income from benefits

According to the regulation, income from the resale of stolen goods will be deducted from social benefits. For example, a recipient of RSA who sells 800 euros worth of stolen goods could see this amount subtracted from their monthly benefits over several months. This could reduce their total monthly income by up to 70% in some cases.

Expanding the scope of the regulation

The regulation is not limited to looting alone. It also targets revenues from drug trafficking, counterfeiting, and tobacco smuggling. These activities contribute significantly to the informal economy in France, with drug trafficking alone generating an estimated 3 billion euros annually.

Risk of increased participation in illegal activities

The reduction in social benefits may encourage some individuals to turn to the underground economy to make up for lost income. For those already struggling to find legal employment or training opportunities, the parallel economy offers an immediate alternative, potentially increasing their involvement in organized crime.

Complementing new legislation

The regulation complements the upcoming "casseur payeur" bill, which will be reviewed by the Senate. This bill introduces "collective civil liability," allowing for the condemnation of individuals involved in violent actions without direct proof of their involvement. It also enables the seizure of social benefits to cover repair costs from such actions.

Reversing the traditional purpose of social benefits

This measure reverses the traditional role of social benefits, which are meant to support vulnerable households and stabilize local economies. Instead, these benefits are now being used as a form of financial punishment, potentially causing errors and complications in their administration.

Risks of financial instability and debt

Households affected by this regulation may face significant financial strain, losing between 40 and 70% of their income over several months. This can lead to unpaid rent, energy bills, and food debts, increasing the number of over-indebtedness applications to the Bank of France. The situation adds to the administrative burden on already stretched committees and could affect even the most vulnerable households.