Background information

'To respond to the challenges faced by the self-employed', the President of the Republic, Emmanuel Macron, unveiled a support plan for the self-employed on 16 September 2021. Although the plan is not a direct consequence of the COVID-19 crisis, it aims to support the viability of businesses and the income of self-employed workers, a category of workers that has been put in difficulty due to the COVID-19 crisis.

Recalling that the 3.6 million self-employed in France had 'suffered greatly from the crisis', the Prime minister, Jean Castex said that 'this plan will enable them to boost their activity'.

The plan contains 20 measures, including improving their social protection and facilitating access to training and retraining. Some are related directly to the COVID-19 crisis and lessons learn from the crisis. These various measures will be included in the Finance Bill for 2022, a bill dedicated to the self-employed and the Social Security Financing Bill for 2022, which will be presented to the Council of Ministers on 22 September, 29 September and 6 October 2021 respectively.

Content of measure

Improvement and simplification of social protection

This part of the plan contains six measures, including some related directly to the COVID-19 crisis and lessons learn from the crisis:

• Facilitating access to the voluntary insurance scheme against the risk of accidents at work and occupational diseases, by lowering the contribution rate. The rate would be reduced by about 30%, with no impact on the benefits paid out, which would remain identical;
• Improve the protection of the collaborating spouse. It is thus planned to open up the status of collaborating spouse to the cohabiting partner of the head of the company, to simplify the methods of calculating the contributions of collaborating spouses of micro-entrepreneurs and to limit the exercise of the status of collaborating spouse to five years in a career in order to acknowledge its temporary nature.
• Allow for the modulation of social contributions in real time. All self-employed people will be able to declare their estimated income as they go along and pay their contributions as closely as possible to the income they receive (instead of paying contribution calculated on the incomes of the previous year.
• Eliminate penalties for underestimating the final income used as a basis for paying contributions.
• Neutralise the effects of the crisis on the basis for calculating daily allowance entitlements in the event of a sharp drop in income. These are calculated by taking into account the income received during the three calendar years preceding the sick leave or maternity leave;
• Preserve pension rights for self-employed people affected by the health crisis. Those in the tourism, events, culture, sport, hotel and restaurant and related sectors will thus have a number of validated pension quarters in 2020 and 2021 equivalent to the average number of quarters validated during their last three financial years.

Facilitating the retraining of the self-employed

The access of the self-employed to the unemployment allowance (allocation des travailleurs indépendants - ATI) would be facilitated. According to Pôle emploi, the French employment public service, only 911 self-employed people have had access to this measure, which has been in force since 1 November 2019, at a cost of €3 million, whereas the impact study predicted 29,300 per year at a cost of €40 million.

Thus, the self-employed would be made eligible for ITA when their activity is no longer economically viable. At present, they only benefit from it when they have exercised a self-employed activity without interruption for at least two years in a single enterprise and are subject to receivership or judicial liquidation proceedings. With regard to this last condition, the aid of approximately €800 per month for six months could now be available if they permanently cease their activity, when it was not economically viable. The criterion of non-viability would be assessed on the basis of a 30% year-on-year drop in the self-employed person's tax income.

In addition, the minimum income requirement for the ITA would also be relaxed. The required amount would only be €10,000 for one of the last two years of self-employment, instead of an average of €10,000 over the last two years.

Another measure envisaged is the doubling of the tax credit for the training of very small businesses managers. This measure would facilitate access to professional training for managers of very small businesses with fewer than ten employees by increasing compensation for the loss of income during the training period.

Making exemption requests more flexible on retirement

In order to encourage the transfer of businesses and know-how, the plan intends to temporarily relax the deadline for applying for exemption from capital gains tax on the sale of a business upon retirement. An entrepreneur who sells his or her sole proprietorship when he or she retires could benefit from this exemption if he or she claims his or her pension rights within a maximum period of 36 months before or after the sale (as opposed to 24 months currently). This measure would apply to farmers who claim their rights in 2019, 2020 or 2021 before the transfer of their business.

Wiping out social security contribution debts in the event of overindebtedness

The plan also aims to facilitate the treatment of social security contribution debts of majority managers of limited liability companies. Although these debts cannot currently be collected under either the collective or the individual over-indebtedness procedure, they could now be written off under the latter procedure.

Use of measure

The plan will cover about 2.9 million of self-employed and 400,000 self-employed in the farmer sector. The evaluation gives by the Prime minister focus on 3.6 million including the farmers, seems to high according the data from INSEE quoted in the press kit.

Target groups

Workers	Businesses	Citizens
Self-employed Platform workers	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government Public employment service Social insurance	National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Informed	Consulted
Form	Not applicable	Direct consultation outside a formal body

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: Peak or cross-sectoral level

Involvement

Some employers' organisations have been consulted, as U2P, but also some organisation that are not representative on national level as the Syndicat des dirigeants indépendants (SDI). No evidence that trade unions have been involved expected be informed about the plan.

Views and reactions

Some employers' organisations have welcomed the plan as U2P, even some other organisations have reservations, such as the SDI, which recognises that the plan unveiled provides the major changes expected, while regretting a certain reluctance to extend the repayment period for state-guaranteed loans, the very limited convergence of social rights between employees and the self-employed, and the maintenance of a still high threshold for entry into the unemployment benefit system.

Sources

• 16 September 2021: Plan indépendants (Press kit) (www.entreprises.gouv.fr)