Self-employed business owners have been granted a right to unemployment benefit in France, albeit bound with some tight conditions.

The right to unemployment benefit (allocation chômage) in France has thus far has been restricted to employees.

However, for many years self-employed groups have campaigned for it to be extended to them, and it became a manifesto pledge by President Emmanuel Macron in 2017.

The scope of the scheme now agreed is broad, concerning all those who run a self-employed business of what ever nature and in whatever legal form, including agricultural workers, artists and authors.

No unemployment benefit insurance contribution is payable, so the change will make no difference to the level of existing cotisations.

However, a relatively tough set of restrictions applies:

• The business must have been in place for an interrupted period of at least two years;
• It must be in compulsory judicial administration or liquidation;
• The former owner must be seeking work and registered with the unemployment agency (Pôle Emploi);
• The business must have generated net income of no greater than €10K per year for the last two tax years;
• The owner must not have been in receipt of other income greater than the minimum income support benefit RSA over the previous 12 months.
  

Where these conditions are met then the level of benefit is €800 per month, for up to a maximum of six months.

The new scheme is effective from 1st November 2019.

Not surprisingly, there is widespread criticism of the scheme, particularly the requirement for enforced administration/liquidation to have taken place, a process that, by itself, costs up to several thousand euros. It means that voluntary liquidation, or mere termination of an unsuccessful business, would not meet the conditions for obtaining the benefit.

In addition, for micro-entrepreneurs, the minimum income threshold of €10K is after deduction of the standard cost allowance that applies for income tax. There are also particular rules for authors and artists.

Some social security contributions may be payable on the benefit, but the details have yet to be elaborated by decree.