PURCHASING POWER LAW 2022. The purchasing power bill was approved during the Council of Ministers on July 7, 2022. Civil servants will benefit from a salary increase with the thaw of the index point.
[Mis à jour le 11 juillet 2022 à 10h21] Presented to the Council of Ministers on July 7 last, the purchasing power bill continues to make people talk, in particular because of the differences between the presidential party and the opposition on several essential points. The measures were then detailed at a press conference by Olivier Véran (government spokesman), Bruno Le Maire (Minister of the Economy) and Olivier Dussopt (Minister of Labour). Objective: “protect the French against inflation”, particularly strong in the context of the pandemic and the war in Ukraine. The government is therefore presenting a vast bill, while committing, as Bruno Le Maire recalled, to keep an eye on “public finances” and on the “deficit”.
If there is one part of this project that has caused a lot of reaction in recent weeks, it is the salary of civil servants. Sure enough, the civil service index point was unfrozen for the first time since 2017 ! Public officials will see their salaries increase this year by 3.5% to account for inflation. The revaluation will take effect in August, with a retroactive effect to July 1, 2022. This is the biggest increase for 37 years, in a sick sector, especially among teachers who are struggling to recruit. A deep evil which can be explained by the level of remuneration. This is why, from September 2022, consultation work will be undertaken between unions and employer representatives to try to reach an agreement, in particular on the attractiveness of careers and career progression. On the opposition side, this increase in the index point for civil servants is considered largely insufficient, Jean-Luc Mélenchon and the Nudes demanded a net increase in 10%.
In summary, the purchasing power bill is divided into three parts. A revaluation of social benefits first, which includes in particular an increase in the RSA, retirement pensions or the disabled adult allowance (AAH). Second part: the implementation of specific aid on constrained expenses linked to the rise in fuel, housing and food prices: “worker fuel allowance”, increase in APL, shield on rents or even food checks . Last part: a revaluation of the net income of those who work, by an increase in the activity bonus, a reduction in the contributions of the self-employed, or even support for profit-sharing and participation in companies. The cost of these new measures is estimated at 20 billion euros.
In a context of high inflation reinforced by the war in Ukraine, the government is putting on the table a series of measures to revalue social minima, but also retirement pensions, APL and the index point. The purchasing power bill also provides for the temporary supervision of energy prices and rents. Here are the essentials of the measures presented on Thursday, July 7.
Revaluation of social benefits
- The 4% revaluation of social minima: this increase concerns the Solidarity Activity Income (RSA), the Disabled Adult Allowance (AAH) and the Solidarity Allowance for the Elderly (Aspa).
- Indexation of pensions to inflation: basic pensions will be immediately increased by 4%, while a minimum retirement pension will be set at 1,100 euros.
Targeted aid for constrained expenses
- An increase in housing assistance (PLA) by 3.5% and the implementation of a shield on rents, aimed at limiting their increase to a maximum of 3.5% until the second quarter of 2023.
- A food voucher for the 9 million poorest households, worth 100 euros, plus 50 euros per dependent child.
- Several support measures in the face of the fuel price increase: the fuel discount of 18 cents per litre, introduced in April, will be extended unchanged until the end of August, after which it should gradually decrease until it disappears in December. It will be replaced by a “worker’s fuel allowance”, which all employees going to work by car will be able to apply for from October: this will range from €100 to €200, with an increase for workers living more than 30km from home. them. The project also provides for an increase in the ceiling of the “tax-free individual transport bonus”: paid by employers to employees using their car to get to work, the ceiling of this bonus could increase from 200 to 400 euros.
- The extension of the “tariff shield”: implemented in the fall of 2021, this measure will be extended until the end of 2022 and provides for the freezing of the price of gas and the limitation of the price of electricity below 4% of rise. Bruno Le Maire promised that there would be “no catch-up” at the start of 2023.
Revalorization of work
- The 4% increase in the activity bonus, paid to workers with low incomes.
- Unfreezing of the index point for civil servants: a revaluation of 3.5% of the point was applied from July 1st.
- The tripling of the Macron bonus: this “exceptional tax-free and desocialized purchasing power bonus” is paid by the employer to the employee on a voluntary basis, and was previously capped at 1000. It could now reach 3000 euro. For companies that have signed a profit-sharing agreement and companies with fewer than 50 employees, the bonus ceiling would increase from 2,000 to 6,000 euros. In addition, companies will be able to split the payment over the year .
- A reduction in the contributions of self-employed workers, which would benefit two-thirds of them.
- The simplification of profit-sharing agreements by unilateral decision in companies with fewer than 50 employees.
The amount of the civil service index point has been totally frozen since 2017. Indeed, for more than 5 years, no general increase in the remuneration of public officials has taken place. Only a few categorical increases have been implemented by Emmanuel Macron since his election as President of the Republic in 2017. But as of this year, the civil service index point will experience a further increase! An increase which should be between 1% and 4%. As a reminder, a general increase of 1% would cost the State 2 billion euros per year. The various unions were demanding an increase of between 3% and 20%. The final amount of the increase in the index point will be known on Tuesday, June 28, 2022.
What measures does the opposition propose for purchasing power?
On Tuesday July 5, the deputies of the New Popular Ecological and Social Union presented their own bill on purchasing power, ahead of the text prepared by the government. The Nupes proposals take up the main points of the common program drawn up during the legislative campaign: increase in the minimum wage to 1,500 euros net, blocking of the prices of basic necessities and energy, revaluation of 10% of housing aid (APL) and the index point of civil servants. To finance these measures, the Nupes proposes an exceptional tax on the “super-profits” of several large companies. The left coalition should try to insert these proposals in the government’s purchasing power bill, in the form of amendments.
For their part, the LR deputies also sent Matignon at the start of the week their proposals for purchasing power. They propose, for example, that the cost of petrol be guaranteed at 1.50 euros per liter, but also a reduction in the CSG (general social security contribution) on well-to-do pensions aimed at offsetting the previous increases, or even a general reduction in employee contributions aimed at raising take-home pay.
The purchasing power bill was a government campaign promise before the legislative elections. He finally arrived only Thursday, July 7 in the Council of Ministers. His examination in the National Assembly will begin on July 18. The text, very dense and rich in controversial points, should however be the subject of long debates in the new hemicycle. The President of the Assembly, Yaël Braun-Pivet, confided on July 3 on France 3 to hope to see the adoption of the text “before the end of July, the beginning of August maximum”, for entry into force of most of the measures at the start of September.