Long-term sick may have to pay costs

A NEW report by the Attali commission has suggested hard-line savings such as making people with serious long-term illnesses pay for part of their treatment, means-testing family allowance and making surviving spouses pay inheritance tax.

The Commission for the Liberation of French Growth, an independent think-tank set up by the government and presided over by economist Jacques Attali, last reported in 2008 with ideas for boosting the economy.

Its new report, meant to help the government bring France out of the recession, has suggested a similar policy to one causing controversy across the Channel: axeing family allowance for the better-off.

However Family Minister Nadine Morano has said this is off-limits. “Family allowance is universal, not means-tested. We are very much attached to this policy, so there is no question of taking up this suggestion,” she said.

Another suggestion, increasing VAT and using the proceeds for social security so as to decrease the cost of employees’ social charges to employers, has similarly been ruled out, this time by Prime Minister François Fillon. Another tough proposal is limiting the existing policy of free medical care for people with affections de longue durée (ALD), serious long-term illnesses. The report suggests free treatment should depend on means, and medical criteria for being assessed as ALD should be tightened.

A more radical alternative suggested is abolishing altogether free care for ALDs and instead putting in place a “health shield” (modelled on the fiscal shield for tax), whereby healthcare, irrespective of illness, would be free only above an overall annual ceiling cost to the patient, to vary according to means.

The president of the National Assembly’s economic affairs commission, Patrick Ollier, has said certain suggestions in the report would reduce debt if taken up, but are politically difficult or impossible because they would be so unpopular.

The report even remarks that “going back to the pre-2007 inheritance tax regime would bring in €1.5 billion”. The 2007 Tepa law reduced inheritance tax for several categories, such as children, nephews and nieces and siblings, and abolished tax for a surviving spouse.

Despite this, according to Les Echos, the bulk of the new report is more conservative than the last one. Overall, it addresses getting out of debt and increasing employment as the short-term priorities, and education and management of scarce natural resources as key to the long term.

President Sarkozy said the report is generally in line with his thinking: it recommends cutting public spending and reducing niches fiscales (various ways of reducing income tax bills), especially ones that mainly benefit the better-off. It is “very useful food for thought for the debate on the reforms that need to be made to safeguard the future of France”, he said.

Other ideas in the report include extending the current policy of not replacing one retiring civil servant in two to local councils and social security bodies, freezing public sector pay until 2013 and freezing certain benefits like the aide au logement.

The Attali commission was set up originally in 2007 and includes 40 thinkers from different fields, including the British historian Theodore Zeldin.