INFLATION INDEMNITY. Amounting to 100 euros, “inflation compensation” aims to respond to the various increases in the price of energy, but not only. While 38 million French people will be able to receive it, will you also be eligible? We take stock.
[Mis à jour le 24 octobre 2021 à 11h42] At the end of October, many French people are doing their accounts, and disaster, with the multiple increases in consumption, impossible to make ends meet. To answer it, the government announced, Thursday, October 21, to set up an “inflation compensation”. Worth 100 euros, it will be intended for all French people unable to cope with the boom in energy prices, but also fuel. Should this be seen as an electoral measure?
The government defends itself, this measure has nothing to do with the next presidential election. “Buying social peace with gift vouchers is good. Tackling the causes of the rise in the prices of fuel, gas, electricity, food, is better”, had in particular questioned the President of the Republicans in National Assembly Damien Abad, on Twitter.
The inflation compensation will come to offer a hundred euros, sometimes more, to the French whose monthly income does not exceed 2,000 euros net. Employees, the self-employed, the unemployed, but also scholarship students and even retirees are concerned. So much for the main lines. If in the idea, everyone should receive this boost of 100 euros individually only once, many special cases can nevertheless change the situation. The inflation compensation could also be paid to some in several installments. The Ministry of the Economy has indeed recognized Friday, October 22 side effects, especially for employees who have different employers or those who have both a salaried activity and a self-employed activity. If you are eligible, there is nothing to do! This payment will be made automatically, either by your company, Pôle emploi, or Urssaf, depending on the plan to which you belong.
The inflation allowance amounts to 100 euros per person, regardless of the composition of the family and whether they own a car or not. This bonus is tax-free and without charges. “This corresponds to the average additional cost for the payment of fuel for a person who travels 14,000 kilometers per year,” Matignon told the press, to justify the amount of the inflation compensation, after the maintenance of Jean Castex at the microphone of TF1 Thursday evening. Can the inflation allowance be paid several times? In several cases, it is indeed possible to receive more than 100 euros in premium:
- If you have several employers, and your net salary does not exceed 2,000 euros net per month.
- If you are self-employed and employed at the same time
- You accumulate your retirement pension and a job
Questioned by BFMTV, the Ministry of the Economy recognizes possible side effects, difficult to avoid. Note: the inflation compensation is paid on an individual basis. If within the same household, two members receive less than 2,000 euros net per month, they will both receive 100 euros in premium in December.
The inflation allowance is intended to be paid between December 2021 and February 2022. No specific date could be brought forward for technical reasons. Indeed, the payment will have to be ensured through several channels, depending on the beneficiary’s situation. Here is the payment schedule envisaged by the government:
- End of December 2021: this is the date on which employees will receive their inflation compensation, directly on their payslip. Indeed, the employer will be responsible for the payment, before being compensated by the State in a second step.
- End of January 2022 : the State will pay the inflation allowance for civil servants and the self-employed.
- February 2022 : it is at this date that the self-employed, unemployed and retirees should receive the inflation allowance.
No. The inflation allowance is not intended to become permanent. It is actually a financial boost for the middle classes. The premium will be paid in one go, between December 2021 and February 2022. The beneficiaries do not have to do anything, because the payment will be automatic. For the employees, it is the employer who will take care of the payment of the inflation compensation, the company being compensated by the State in a second step via a reduction in employer contributions. For retirees, it will be the pension fund that will have to ensure the payment. The self-employed will receive aid via the Urssafs. What about the thorny case of private employers? If he pays via Cesu +, then Urssaf manages everything. If the remuneration is made via the normal Cesu, the individual employer will be informed of the amount to be paid to his employee. It will be refunded later.
The premium announced by the government is aimed at the middle classes. To determine eligibility for inflation compensation, the government has set a ceiling: are therefore concerned French people who earn less than 2,000 euros net per month – before application of the withholding tax – (1,943 euros per month for retirees), regardless of their status and profession. Employees, self-employed, civil servants, farmers, retirees, apprentices, students and scholarship students are in the sights of this measure, whether they are full-time or part-time. In total, 38 million people in France should benefit from it.
Asked by Les Echos, the government specifies that it is the salary before withholding tax that will be scrutinized to determine if you are eligible. “The idea is to take a typical month,” we told the daily business. The month of November or October could thus be chosen. No risk, therefore, that a thirteenth month or an end-of-year bonus will prevent certain beneficiaries from receiving the inflation allowance. On the payslip, it will therefore simply be necessary to check the line “net to pay before income tax“, above” net payable “.
For the self-employed, the government must look at taxable income for the year 2020. It will pay the inflation allowance to those who have earned less than 30,000 euros, AFP added. The activity must bring in at least 500 euros per month and not exceed 2,000 euros net per month.
A noter : aid is received on an individual basis. In other words, within a couple for example, if the spouses both earn less than 2,000 euros net per month, they will both receive the inflation allowance, ie 200 euros in total. “This threshold of 2,000 euros which was decided, per person and not at the scale of the tax household, it covers more than half of working people and 70% of retirees”, detailed Gabriel Attal at the microphone of France 2.
Apprentices, scholarship students and students will be able to benefit from the inflation allowance of 100 euros. The only condition is to have less than 2,000 euros per month net monthly and to be fiscally independent. In other words, you should no longer be attached to your parents’ tax household. “I believe that this is around two-thirds of the students who will be concerned,” said government spokesman Gabriel Attal at the microphone of France 2 on Friday morning.
“All scholarship students and those who have an independent tax home: it is estimated that 1.7 million students will benefit from it,” said Frédérique Vidal at the microphone of Sud Radio on Friday. “For scholarship students, we have the files. It will be automatic and paid in December,” she added. “For the others, it will be the classic mechanisms provided for all fellow citizens. The students are autonomous young people, we must support them in this autonomy”.
“These aids are palliative, but will not really change things”, tackled Friday on France Info, Cécile Thévenet, member of the national office of Fage (Federation of general student associations). She believes that the financial aid is not broad enough, and should concern “all students”.
Yes, retirees will benefit from the inflation allowance. However, the income condition has been clarified. You must receive an accumulation of pensions (from the general and supplementary scheme) of less than 1,943 euros per month and per person, Matignon said. Why this ceiling of 1,943 euros and not 2,000 euros net like other employees? The pension funds do not communicate the amounts of retreats. Consequently, the government has favored the exclusion of households paying the full rate CSG (8.3%). For a pensioner living alone, the accumulation of pensions must not therefore exceed 1,943 euros per month.
According to Capital.fr, this ceiling remains very vague. According to a Bercy document, 13 million retirees would be affected, having a benchmark tax income of less than 1,943 euros. In other words, pensions would no longer only be taken into account, since the reference tax income – which appears on your last tax notice – includes all the income received by the tax household (labor income, property income, income from assets and capital). The magazine questioned the Secretary of State for Pensions to find out whether the government was going to withhold the reference tax income or the amount of the pension to determine eligibility for the inflation allowance. He did not get an answer.
Yes ! Beneficiaries of Solidarity labor income (RSA) are also among the beneficiaries of the inflation allowance. As a reminder, the RSA concerns people who have very few resources. The amount of the social benefit of the CAF reaches 65 euros for a single person, without housing allowance.
Unemployed people actively seeking employment who receive an unemployment benefit of less than 2,000 euros net per month are eligible for inflation compensation. In all likelihood, it is Pôle emploi which will take care of the payment of this bonus. You will not have to initiate any steps to ensure the payment.
Yes, beneficiaries of social minima, including the disabled adult allowance, are affected by the inflation allowance of 100 euros. The disabled adult allowance is a financial aid granted to certain disabled people, on condition that they meet certain disability and income criteria. In 2021, the amount ofAAH a single person without resources reaches 903.60 euros. As the AAH is paid by CAF, it is the Family Allowances Fund which will have to ensure the payment of the inflation allowance.
The executive has renounced the creation of a fuel check, qualified as a “gas factory”, for technical reasons. The implementation of a system dedicated to motorists would indeed have required cross-referencing several data: tax information (the benchmark tax income of the French) and information relating to the use of their vehicle. Data far too difficult to collect to end with the fuel check. For this reason, the government has favored the payment of tax-free assistance, whether you own a vehicle or not.