ABOUT THIS Perspective
The French social welfare system is up for reform through the newly proposed Individual Activity Accounts, which aim to make social benefits universal, mobile and on-demand. If the reforms are implemented as proposed, social benefits will be used more efficiently and distributed more equitably.
France has proposed to reform its social welfare system and combine all of its different social benefits into one account. The blueprint of the Individual Activity Account (IAA), as it will be known, has just been released. The blueprint outlines a social welfare system that is universal, flexible and highly personalized. These elements are highly desirable for a modern social welfare system, given the changing nature of work.
The spread of advanced information and communication technology coupled with globalization has changed the way people work. Most significantly, it has led to a rise in non-standard forms of employment. Nearly 32 percent of workers in the EU are in temporary or part-time employment and over 16 percent are self employed (OECD, 2013). Most of these workers do not get any entitlements for training or unemployment insurance under the current system.
The blueprint proposes a universal system of social welfare that will be linked with individuals and not with their employment status or employers. This would extend social benefits to all workers including those engaged in the most insecure jobs. It will also allow workers to change jobs without fear of losing their entitlements.
Under the proposed system, workers will also have a high degree of flexibility with regard to which benefits they use and to what degree. The system allows for workers to swap their entitlements. For example, a worker could shorten their unemployment benefits and enhance their entitlements towards education or training instead.
Many workers already enjoy the freedom of choosing when and where they work through telework systems. A system of fungible entitlements will allow them to choose how much to work in each phase of life, according to their own priorities.
Presently, the IAA is only a blueprint and may not materialize in this form. However, if implemented, social benefits will be used more efficiently and distributed more equitably. Like most digital services today, workers’ benefits will also be universal, mobile and on-demand.