It’s the “first challenge” of the new government, according to Elisabeth Borne. The executive presented, Thursday, July 7 in the Council of Ministers the bill “for the protection of purchasing power” and the amending finance bill for 2022. Texts expected as inflation continues to accelerate, to 5.8% in June over one year according to INSEE.
>> Follow the latest government announcements on purchasing power live
The Prime Minister promised, in her general policy speech, measures “concrete, fast, efficient” to cope with rising prices. Here is what to remember from the government’s proposals, which will be debated in the National Assembly from July 18.
Extension of the tariff shield on energy until the end of the year
The government intends to extend until the end of the year the “tariff shield” on energy, which regulates the prices of electricity and gas. This system makes it possible to cap the increase in electricity bills at 4% and to freeze gas prices at their October 2021 level.
Gradual end of the 18-cent rebate from the end of September
Regarding fuel, the rebate of 18 cents at the pump, introduced in April by the government for a period of four months, must last beyond July 31. The text plans to extend this discount of 18 cents until the end of September.
The government then wants to reduce this boost. Its amount would thus increase to 12 cents from October, 6 cents in November, before being abolished from 1 December.
A “workers” fuel allowance of 100 to 300 euros from October
A “workers” fuel allowance must be put in place from 1 October. This one-off aid of a total amount of 100 to 300 euros can be paid, all at once, to low-income workers.
In detail, they will be able to receive 100 to 200 euros depending on their income levels. This amount may be supplemented by a “bonus” of 50 to 100 euros for “big rollers” who live more than 30 kilometers from their place of work or travel more than 12,000 kilometers per year in the professional context. L’indemnity may be requested on the website of the General Directorate of Public Finance. “Twelve million households”between deciles 1 to 5 of reference tax income, will be affected by this measure, said Bruno Le Maire at the exit of the Council of Ministers.
The ceiling of the “Macron bonus” tripled
The text plans to perpetuate and triple the ceiling of the exceptional purchasing power bonus, known as the “Macron bonus”, paid since 2019. Companies will have the possibility of paying up to 3,000 euros in bonus, and up to 6,000 euros for those who have set up a profit-sharing or participation scheme. This premium will be exempt from employer and employee social security contributions.
A reduction in the contributions of the self-employed is also planned. This will be around 550 euros per year for an income at the level of the minimum wage.
The index point for civil servants revalued by 3.5%
This is not a surprise, the government has been promising it for several weeks already. The 5.7 million civil servants are also affected by the government’s measures. The index point which serves as the basis for their remuneration will be increased by 3.5%. This increase will be applied retroactively from July 1. This will be the largest revaluation of the index point since 1985, but it does not compensate for inflation.
Retirement pensions and social benefits increased by 4%
Retirement and disability pensions under the basic schemes will be increased by 4% from 1 July. This revaluation comes on top of the 1.1% increase in January.
The bill also provides for an increase in family benefits and social minima up to 4%. This concerns in particular the active solidarity income (RSA), the allowance for disabled adults (AAH), the solidarity allowance for the elderly (APSA), the activity bonus or even disability pensions. This boost will be retroactive to July 1.
In addition, scholarships based on social criteria for students will also increase by 4%. However, this measure will pass by decree and is not formally part of the purchasing power bill, franceinfo has learned. In addition, meals at 1 euro for scholarship students will be maintained for the 2022-2023 academic year.
Rent increase capped at 3.5%
On housing, the government intends to deploy a “rent shield”. The executive proposes to limit the rise in rental prices to a maximum of 3.5% for one year. Until now, the benchmark rent index was indexed to inflation.
At the same time, the government intends to increase the personalized housing aid (APL) by 3.5% from July 1. The cost of this measure is estimated at more than 160 million euros by the government. Some 5.8 million households will benefit from this upgrade, including 2.6 million households in social housing and nearly 800,000 students, according to the government.
A “food check” of at least 100 euros for eight million households
The Minister of the Economy announced at the end of the Council of Ministers a “food voucher” of 100 euros per household, to which will be added 50 euros per child. It will be paid in September to nearly eight million households, covering 14 million people, according to the government. This aid will be distributed automatically to recipients of social minima, housing aid and scholarship students.
On the other hand, the purchasing power bill does not include the possibility for supermarkets to practice food promotions of up to 50%. The proposal made Monday on France Inter by Bruno Le Maire was “discarded this [mardi] morning”during a working meeting around Emmanuel Macron.
The audiovisual license fee abolished
No surprise there either: 27 million households will no longer have to pay the audiovisual license fee. In its amending finance bill, the government provides for the abolition of the contribution to public broadcasting from the start of the next school year. Its amount is 138 euros in France, 88 euros overseas.