Reform of family benefits in France: Priority to early childhood
France's family allowance policies have been accompanied by a relatively healthy demographic situation in the country
France’s long-standing and acclaimed approach to family policies has attracted growing worldwide attention during the last decade. The success of French demography (its fertility rate is among the highest in Europe, together with Ireland) can partly be imputed to the overall effects of the benefits and facilities provided. Recent changes in family benefits have further intensified efforts to improve the services provided for small children. They make it easier to reconcile family and professional life and thus encourage a relatively high fertility rate in a period of increasing equality between men and women.
Family policy: wide frontiers
The scope of family policy has widened steadily since the first legislation on social welfare was introduced the end of the 19th century with the introduction of the Family Branch of Social Security during the post-war period, culminating in present-day socio-fiscal measures.
In addition to the allowances distributed by family allowance funds (Caisses d’Allocations familiales (CAF)) the public authorities also provide direct payments to families for the care of children and other related benefits. Some of these provisions interconnect with policies in other areas such as housing, education, employment and the fight against poverty. Apart from “classical” family cash benefits, families also cumulate a number of other advantages under the heading of housing benefits, tax benefits related to the specificities of the French tax system and deferred benefits such as retirement.
Family policy can be presented as four concentric circles grouping the principal expenditures.
- The first circle includes expenditure on "family" and "maternity" as listed in the European statistical nomenclature. Apart from the family allowances provided by the CAFs, this group includes local authority expenditure on social welfare for children and maternity benefits provided under the health insurance scheme. Total expenditure on these items amounts to 3 per cent of GDP.
- Certain other measures which contribute to redistribution to families must also be taken into account. The composition of the family is an element which affects the calculation of housing allowances and certain social minima. This brings expenditure on the family up to 3.3 per cent of GDP.
- Further benefits in the form of reduced taxes must also be included. “Tax expenditures” is a frequently-used term referring to the loss of tax revenues, which further increase expenditure on social welfare. Tax reductions for families include various child-based elements which affect the level of taxation. When tax reductions for families are included, expenditure on the family and maternity rises to 4 per cent of GDP.
- Finally, a broad definition of family policy must also take into account the effects of retirement benefits on the family: child-based increases in pension rights and in the duration of insurance. Using this broad definition, social welfare expenditure on the family and maternity amounts to 5 per cent of GDP.
Based on its comparative conventions, the OECD places France at the top of the list for expenditure on family policy with almost 4 GDP percentage points.
A growing emphasis on early childhood
Activity among women has increased and since the 1970s has led to new measures in favour of families which are often intended to facilitate it, and which involve activities focusing on early childhood.
Early childhood strategies can be divided into three groups:
- increased child-care facilities (nurseries) and better financial support for them;
- increased benefits to provide partial cover of the cost of child care by registered childminders;
- paid parental leave for a parent who withdraws, either partly or entirely, from the labour market.
From 1970 onwards the government and the CAFs decided to subsidise nurseries. In 1977 nannies, under the new title of childminders, were given formal legal status. Since 1980 the CAFs have provided financial assistance for parental employers. From 1983 onwards the CAFs have entered into "nursery contracts" with local authorities who invest in them. In 1989 childminding expenses were made tax-deductible.
In 1985, under a left-wing government, a parental education allowance (allocation parentale d’éducation (APE)) was introduced for a parent (almost always the mother) who withdraws wholly or partly from work in order to bring up children (from the third child onwards). This allowance falls between unemployment measures and classical measures affecting family policy.
An allowance for childminding at home (allocation pour la garde d’enfant à domicile (AGED)) was introduced in 1986 under a right-wing government; in practice it benefited the more wealthy households, but it also contributed to the extension of service jobs and to the fight against undeclared work.
A subsidy was created in 1990 to help families employing a registered childminder (l’aide aux familles pour l’emploi d’une assistante maternelle agréée (AFEAMA)) and family legislation introduced in 1994 extended the benefit of the APE to the second child.
The benefits thus provided enable parents (usually the mother) to interrupt their careers in order to look after their children, while at the same time helping them to make arrangements for their children to be looked after if they prefer to remain at work. "Freedom of choice" is given as the underlying principle behind the development of community facilities, individual benefits for child-minding and paid leave for parents. The public authorities aim to provide support for family (mothers’) aspirations of all kinds, whether it means remaining at home, returning to it or active employment.
The different parameters of these various types of intervention have been the subject of much debate and have developed in different directions. The AGED, like all the fiscal benefits connected with childminding, has thus led to more or less favourable measures depending on the majority in power. Differences of opinion have tended to disappear (although they may resurface eventually), and the stated objective remains the development of all types of child-minding facilities.
Early childhood is today’s priority
A further aim has been to simplify measures that were considered too scattered. This led to the creation of a young child’s benefit (Prestation d’Accueil du Jeune Enfant (PAJE)) in 2004.
The dual objective of the PAJE is to simplify legislation concerning childminding for young children and to provide greater freedom of choice for parents. Its aim is to enable them to choose the type of facility they think best for their child and to reduce, or suspend, their professional activities in order to devote themselves to their child’s education. Families can claim this new benefit, which replaces five others, on the birth or adoption of a child. It includes a special payment on birth or adoption and a basic allowance. It also includes a supplementary benefit for freedom of choice of activity (complément de libre choix d'activité (CLCA)), and a payment to ensure freedom of choice of childminding facilities (complément de libre choix du mode de garde (CMG)). The latter is paid when parents who were actively employed choose to have their child looked after at home or, as is more frequently the case, by a registered childminder. This supplementary benefit replaces the AFEAMA and the AGED. The CLCA replaces the APE; it differs from the latter in that it also applies to a first child.
Enterprises have also participated in the extremely rapid development of facilities for the care of young children. Subsidies have been provided to enable the private sector to create and operate such facilities. Enterprises can apply for tax rebates on measures to help those of their employees with family responsibilities. Since 2004, the public authorities can finance up to 80 per cent of the investment needed to enable a company to create its own nursery.
Increasing efforts have been made over the past 25 years in favour of small children. Special benefits for early childhood have increased from a quarter to a third of the total family benefits paid by the CAFs. Furthermore, local authorities have been closely involved in the development of these facilities, which offered a total of 350,000 places in 2008.
Recent years have been characterised by debate on basic principles, with no radical innovations. Two converging projects have surfaced regularly since 2007. They involve a move towards a “public service for early childhood” or towards “an enforceable right to child care”. In both cases the principle, which is based on policies in Scandinavian countries, involves the proposal of childcare for all children under three years of age. It is a fact that the northern European countries are those which provide the most extensive and best appreciated policies for small children.
In France, the move towards a reorganization of this kind (public service and/or enforceable right), would mean a general reform of the governance of French family policy, which is not currently on the agenda.
It should be emphasized that the prioritization of early childhood in family policies and benefits has been accompanied by a relatively healthy demographic situation in the country. However, it should also be pointed out that there is a low correlation between the level of expenditure, the quality of available childcare and fertility rates. The French model cannot therefore provide an exportable “solution” to the demographic concerns of developed countries.
Text by: Julien Damon, Associate Professor, Institut d'Etudes Politiques de Paris (Sciences Po)
ISSA Good Practice Awards for Europe
The National Family Allowances Fund in France has won the first Good Practice Award for Europe for the creation of the “mon-enfant.fr” Website, which provides comprehensive information on childcare solutions throughout the country for families and professionals.