Health & Social Security

The French Social Security System – Introduction

This overview will only deal with the general scheme, the unemployment insurance scheme and the supplementary pension schemes which cover all private-sector salaried workers.

Organizational structure

The general scheme is managed by a network of local, regional and national institutions organized by risk and administered by representatives of employers and employees under the supervision of the different ministries in charge of social security (the Ministry of Labor and Health and the Ministry of Finance and Public Accounts).

Financing

The general scheme is financed mainly by contributions and taxes deducted from earnings, which account for approximately 80% of total revenue. Contributions are calculated on the basis of percentage rates decided at national level and are borne partly by employers and partly by employees. The two social welfare taxes, the "Contribution Sociale Généralisée" (CSG) and the "Contribution pour le Remboursement de la Dette Sociale" (CRDS) are borne by employees. Current contribution rates and earnings ceilings are given in the appendix.

CSG and CRDS are paid on income from employment, replacement income, property income, investment income and gambling income. All persons treated as residents of France for income tax purposes and subject to a French compulsory health insurance scheme are liable to CSG (at the rate of 7.5% on earned income and 6.2% on replacement income) and CRDS at the rate of 0.5% on their earnings.

In addition, a 1% health insurance contribution withholding is also applied to both compulsory and non-compulsory supplementary pension schemes.

However, persons subject to the compulsory health insurance scheme who are not treated as residents of France for income tax purposes are liable to employees' health insurance contributions at the 5.5% rate applicable before 1st January 1998.

Persons in receipt of a retirement pension who are not treated as residents of France for tax purposes but subject to a compulsory health insurance scheme are liable to a 3.20% tax on their basic pension and a 4.20% tax on their compulsory and voluntary supplementary pensions under the general scheme.

Scope and coverage

The compulsory general scheme covers wage earners in the private industrial, trade, and service sectors.

It is organized into five branches:

  • the health, maternity, paternity, disability, and death branch and
  • the industrial accident and occupational illness branch, which are managed separately by the National Salaried Workers' Health Insurance Fund (Caisse Nationale d'Assurance Maladie des Travailleurs Salariés/ CNAMTS)
  • the old-age branch, managed by the National Old-Age Insurance Fund (Caisse Nationale d'Assurance Vieillesse/ CNAV),
  • the family branch, managed by the National Family Benefits Fund (Caisse Nationale d'Allocations Familiales/ CNAF)
  • the contributions and collections branch, managed by the Agence Centrale des Organismes de Sécurité Sociale (French Social Security Central Agency/ ACOSS), which brings together the Unions de Recouvrement de Cotisations de Sécurité Sociale et d'Allocations Familiales (Social Security and Family Benefits Contributions Collections Unions/ URSSAF) which are in charge of collecting all employers' contributions.

Two criteria must be met for compulsory membership in the general scheme:

  • the payment of any type of compensation on which contributions must be paid,
  • the existence of a link of subordination between the worker and one or more employers.
  • There is also an unemployment insurance scheme, which covers all employees subject to the general and agricultural schemes.

In France, all employers hiring an employee are first required to file a pre-employment declaration with the relevant institution in charge of collecting social security contributions (URSSAF). The declaration enables registration for social security purposes of employees without a Social Security Number, as well as registration for unemployment insurance purposes. For supplementary pension schemes, employees are registered with the scheme to which their employer belongs which will depend on the company's location or field of activity.

The URSSAF agencies collect and distribute Social Security contributions. They finance the reimbursement of medical care, medical leave, maternity, and industrial accident benefits, and fund basic pensions and family benefits for those covered by the general Social Security scheme.

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