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Social security ‘hole’ shrinking

Next year the social security defecit is expected to be €11.3billion - less than half what it was in 2010

FRANCE’S famous “social security hole” (le trou de la Sécu) will next year not be quite as deep as before – the deficit should be €11.3billion, down from €13.3bn this year.

The reduction is said to be due to austerity measures brought in by the last government in summer 2011 and the present government this summer and to come in next year’s budget.

In 2010 the deficit stood at €23.9bn.

Social Security Minister Marisol Tourraine said it came down to new taxation plus savings, but she added that health remained a priority for the government.

Health spending remains the social security branch with the largest deficit – €5.1bn this year, and the draft social security budget for 2013 includes €2.4bn in savings in this expenditure. Next highest costs are pensions (€4bn) and family (€2.6bn). Spending for work accidents is in the black after a 0.1bn deficit last year.

Apart from the above, which make up the “general regime” of social security, there is also the Fonds de Solidarité Vieillesse, which funds pension top-ups for poorer pensioners and the retirement contributions of unemployed people, which is expected to be €2.6bn in deficit next year, down from €4.1bn.

Measures contributing towards the reduction include a new 0.15% tax on pensions and new taxes on beer and cigarettes. The price of a small glass of beer will go up about 5 centimes, the government says. As for cigarettes, they have just gone up 40 centimes a pack and another rise is planned for July 1 next year. Out of the price of a pack of cigarettes 64.7% will go to fund social security, up slightly from 64.25%.

Smokers and beer drinkers are hit

Photo: Foto Sapiens www.fololia.com

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