It is a real stone in the pond that the Court of Auditors is throwing by attacking a system very popular with families: the tax credit for employment at home, nannies, cleaners, gardeners and other helpers. of life for the elderly that the French rely on in their daily lives.
This system is considered too expensive, in a report published Wednesday, which recommends overhauling the aid system.
An understandable barrage at a time when the government is looking for savings in all directions.
But contradictory with the executive's objective of freeing households from the constraints of childcare, to increase the employment rate.
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Between the tax credit, reduced VAT rates and exemptions from social security contributions, personal services benefited from state aid of 8.8 billion in 2022, an increase of more than 40% per year. compared to 2012, including 37% over the last five years.
This represents on average 9.4 euros of public aid per hour worked.
This increase in expenses, which contrasts with the stagnation of activity in the sector, is explained both by the strengthening of certain support measures, by the increase in the hourly cost of these activities, linked to the increase in the minimum wage, and the rise of service providers whose prices are higher than the cost for an individual of directly employing an employee in their home.
“
Consumption of personal services
is concentrated on the 20% of households with the highest incomes, for whom public assistance is undoubtedly less decisive”
Court of Audit
However, this aid benefits the richest, affirms the Court, which points to the risk of a “windfall effect”, while the consumption of personal services “
is concentrated on the 20% of households with the highest incomes, for for which public aid is undoubtedly less decisive
.
Furthermore, if the public authorities have been able to simplify procedures for households with the implementation of the universal service employment check (Cesu) and by the deployment of the immediate advance of the tax credit, the Court criticizes the complexity of the mechanisms, which generates “
risks of irregularities and fraud, the extent of which has not been assessed
”.
If these measures have made it possible to reduce undeclared work, the financial resources involved appear “
disproportionate to the
results obtained
”, judges the Court.
The State today "
very largely
" subsidizes compliance with the law and declaration of work: for a given net salary, the cost remaining the responsibility of the individual employer who declares the salary paid is lower, depending on the activities, by 14% to 19% to the cost of hidden labor.
Also read: Why tracking down undeclared work yields so little
Finally, although State aid for personal services has made it possible to regularize jobs, it has had only a small impact on the creation of new jobs, according to the Court.
The dynamic development of the 2000s was followed by a period of decline then stagnation in activity measured in number of hours worked.
The results in terms of job creation are “
insignificant
” (around 70,000 additional full-time equivalents since 2005) judges the Court, “
while the increase in the number of elderly people needing to use home services should contribute to the natural dynamism of the sector
.
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In view of these observations and taking into account the prospects for increased expenditure linked to the autonomy of elderly people, it is necessary
to "
rethink
" the support systems for personal services, in order to
"make them
more readable
» and to “
put an end to the blind increase in
public spending
”, recommend the financial magistrates.
They suggest reducing the scope of activities eligible for state support, limiting the
use of reduced VAT rates - with a rate of 5.5% for priority social needs, the others returning to the normal rate of 20% - and put an end to exceptional social security contribution exemption schemes.
One radical scenario, the other less ambitious
For the tax credit, the financial magistrates propose two scenarios.
The most radical is to now base the care of young children, assistance to the elderly, and assistance to people with disabilities, exclusively on the measures provided for in social policies.
“
Such a reform implies significant consequences on social benefits to maintain the same level of support for vulnerable people
,” recognizes the Court.
Another scenario, less ambitious, would consist of modulating the parameters of the tax credit, according to the activities concerned or according to the characteristics of the taxpayers.
“
This would make it possible to preserve activities linked to autonomy or childcare, which would benefit from an increased rate of aid
.”
Finally, the tax advantage could be differentiated according to the methods of using personal services (directly or through a service provider) and associated with greater requirements in terms of training and professionalization of
workers in this sector.
Ultimately, the Court estimates that it will be able to achieve an overall saving for public finances of, depending on the scenario chosen, between 900 million and 1.1 billion euros per year, or more than 10% of the total financial effort.