France curbs unemployment benefits in bid to fill job vacancies

France is clamping down on unemployment payments, with the government on Monday announcing new rules that it’s hoped will return up to 150,000 people to the workforce early next year.

With many sectors are experiencing difficulties in recruiting, the aim of France's reform of unemployment benefits is to encourage people to return to work more quickly. AFP - PASCAL GUYOT

Labour Minister Olivier Dussopt said the amount time time jobseekers are eligible to claim benefits would be cut by 25 percent from February.

Under existing rules, people aged under 53 can claim a maximum two years’ compensation after losing their job. For people over 55, this rises to three years.

"We're keeping one of the most generous systems in Europe," Dussopt said.

Difficulty recruiting

With many sectors are experiencing difficulties in recruiting – despite high inflation and the impact of the war in Ukraine – the aim of the reform is to encourage people to return to work more quickly.

France's unemployment is at 7.3 percent – the lowest it's been in 14 years – however youth unemployment is higher at 16.3 percent.

The new rules come after a law was passed by parliament last week giving the government powers to change the unemployment system by decree, depending on the state of the labour market.

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A report by BFMTV said the government intended to vary jobseekers’ rights in accordance with France’s unemployment rate.

If unemployment is below 9 percent, or drops for three consecutive quarters, the country will be in a "green period”, with a 25 percent reduction on the amount of time benefits are paid.

If unemployment rises above 9 percent, or increases by 0.8 percent in one quarter, the country goes into a "red period”, with benefits fully restored.