The French government has announced that the activity bonus, a financial aid given to 4.5 million people to encourage participation in the workforce, will not be adjusted for inflation in 2027. The decision was confirmed by Minister of Labor and Solidarity Jean-Pierre Farandou during an interview on Télématin on France 2 on September 30. He explained that the freeze is part of broader efforts to stabilize the country's finances, which are under pressure from growing deficits and public debt. While acknowledging the difficulty of the decision, the minister emphasized that the matter will be debated in Parliament, with possible changes to the policy.
In 2026, the activity bonus was raised by 50 euros per month after intense political discussions. The eligibility criteria for the bonus have also been slightly relaxed, allowing employees whose net monthly income slightly exceeds 2,000 euros to qualify. In 2024, the family allowance funds (CAF) spent 10.3 billion euros on the activity bonus, highlighting its significant role in supporting low-income workers.
Some social benefits, including the active solidarity income (RSA), the minimum old-age pension, and the adult disabled allowance (AAH), will be fully indexed to inflation, which is projected to be 1.8% next year. However, the minister did not provide further details on the 2027 budget bill and the social security financing bill, which are set to be officially presented on October 1. He noted that the government does not necessarily intend to remove the inflation link for all benefits and that Parliament will debate the appropriate level of adjustment.
The future of pensions remains unclear, though the Prime Minister has repeatedly expressed a commitment to protecting smaller pensions. One possible approach involves fully indexing pensions up to 1,260 euros per month to inflation, with higher pensions facing partial or full deindexing. This could be paired with changes to the tax exemption for retirees. Additionally, the minister mentioned an increase in food aid, with an extra 24 million euros allocated to assist an additional 15% of people in need.
French Government Freezes Activity Bonus for 2027 Amid Inflation Concerns
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