File n° 39 

I. – the social security finance laws: particularity, content and presentation

1. – The definition of social security finance laws

Article 34 of the Constitution, as modified by the constitutional law of February 22, 1996, provides that social security finance laws “shall determine the general conditions for the financial balance of social security and, in the light of their revenue forecasts, shall determine expenditure targets in the manner and with the reservations specified in an institutional Act”.

There are two categories of social security finance laws: the finance law of the year and the “corrected” finance laws. For the moment, no “corrected” finance bill has been discussed.

The specific rules which apply to them are laid down by the institutional law of July 22, 1996, whose provisions were substantially modified by the institutional law of August 2, 2005. These institutional provisions are codified in articles L.O. 111-3 to L.O. 111-10-2 of the Social Security Code.

The social security finance law is a particular category of law: it sets the operating balances for the basic, obligatory, social security schemes and for the bodies which contribute to their financing. Furthermore, it can authorize certain of these bodies to take out loans and can include a certain number of other measures of a financial nature or which improve the monitoring of Parliament over the finances of social security.

The scope of the social security finance laws covers all the basic, obligatory, social security schemes (and thus excludes complementary schemes and unemployment insurance) and the bodies contributing to their financing: the Old Age Solidarity Fund (FSV) and the Fund for the Financing of Agricultural Welfare Benefits (FFIPSA). It also includes the Reserve Retirement Fund (FFR), the Social Welfare Debt Sinking Fund (CADES) and the National Solidarity Fund for Autonomy (CNSA).

In accordance with the institutional law of 2005, the social security finance laws have exclusive jurisdiction in the case of the total or partial allocation to any other legal entity of the exclusive revenue of the basic schemes or of the bodies which contribute to their financing. Similarly, only a social security finance law can authorize the non-compensation by the State of reduction measures in social contributions which it has decided.

2. – The content of the social security finance laws

Since the institutional law of 2005, one of the specificities of the social security finance laws has been to include balance sheets. For each financial year examined, these balance sheets display the financial situation of each branch of the social security system for the general scheme, for all the basic, obligatory schemes and  for all the bodies contributing to their financing.

The social security finance law for the year Y has four parts.

The first part concerns the last full financial year (Y-2).

The second part deals with provisions concerning the current year (Y-1). This enables the Government to propose to Parliament to pass corrections for the current year. This part is divided into two sub-sections. The first relates to revenue and the general balance and the second to expenditure.

The third part sets down the forecast revenue and the general balance for the basic, obligatory, social security schemes and for the bodies which contribute to their financing for the year Y. In addition to the balance sheets concerning the year Y (revenue, expenditure and balance), it also sets the ceiling on the cash advances which the schemes may request. 

The fourth part sets the expenditure targets for the different branches of the social security system (health, work accidents, work-related illnesses, old age and family) which may be divided into sub-targets. This part includes the National Expenditure Target for Health Insurance (ONDAM) and its sub-targets.

Article L.O. 111-3 of the Social Security Code provides that the accounts of the social security schemes and bodies must be in order and honest and faithfully represent their assets and their financial situation.

3. – Documents annexed to the social security finance bills

The social security finance bill has a certain number of annexes. Amongst them three are particularly interesting:

―  One points out the financial impact of new measures proposed;

―   Another analyzes the situation concerning the reductions in resources for schemes decided by the State and the amount of corresponding compensation which the State pays into the social security system;

―   A third is part of a more qualitative assessment approach and presents social security policy “programmes of quality and efficiency” (PQE) in each of the branches.

The social security finance law includes, in addition, the approval of two reports. The first describes the measures anticipated for the allocation of surpluses or for the covering of deficits which may be noticed at the time of the passing of the part concerning the last full financial year. The second sets out the forecast development of the social finances of the social security system over the following four years.

II. – A specific parliamentary procedure

Since the institutional law of 2005, Parliament has taken part in the preparation of the social security finance bill thanks to a debate in the spring on the direction to be taken by the finances of the social security system. This debate is held on the basis of a Government report.

The Government has a monopoly on the presentation of the social security finance laws which can thus not be the result of the passing of a Members' bill. This is in accordance with article 47-1 of the Constitution which sets down the main references for the procedure to be applied in the examination by Parliament of the social security finance bills. 

1. – A discussion within constitutional time limits

Article 39 of the Constitution states that social security finance bills must be firstly submitted to the National Assembly. The social security finance bill, as well as the two reports annexed must be tabled, at the latest by October 15, or if this day is a holiday, then the first working day after.

Article 47-1 of the Constitution sets strict time limits for the examination of social security finance bills: if the National Assembly has not reached a decision on first reading within twenty days following the tabling of the bill, the Government refers the bill to the Senate. The later must rule within fifteen days. If Parliament fails to reach a decision within fifty days in all, the provisions of the bill may be implemented by ordinance.

The institutional law of August 2, 2005 makes the emergency procedure applicable, as of right, to the examination of social security finance bills.  

The compensation for these restrictive time limits is a specific protection for the field of the social security finance law. Thus provisions having no connection with the financing of social security are considered as “social wooden horses of Troy” and are removed by the Constitutional Council (if not already declared inadmissible by the Chairman of the Finance Committee in the case of amendments coming from Parliament). 

2. – Examination in committee

On the contrary of the finance bills which, in accordance with an institutional provision, are referred to the committees dealing with financial matters, there is no automatic referral for a social security finance bill to the parliamentary committees dealing with social matters. However, at the National Assembly, the Committee for Cultural, Family and Social Affairs traditionally takes the role of the lead committee for the social security finance bills. The Finance, General Economy and Planning Committee refers the bill to itself for opinion.  

In the first quarter of each year, the Committee for Cultural, Family and Social Affairs appoints four rapporteurs, who are in charge, respectively, of a) revenue and general balance, b) health insurance, work accidents and work-related illnesses, c) the family branch and d) the old age branch. These rapporteurs follow and monitor the implementation of the social security finance laws and carry out an evaluation of all questions relating to the financing of the social security system. To do this, they may carry out checks which grant them complete access to all evidence. Before July 10, every year, they send questionnaires to the Government so as to prepare the examination of the social security finance bill. The Committee for Cultural, Family and Social Affairs may follow all year long the implementation of the social security finance laws thanks to the work of the Assessment and Monitoring Mission for the Social Security Finance Laws (MECSS), which is made up of some of its members, and thanks to the Parliamentary Office for the Assessment of Health Policy (OPEPS).

The work relating to the social security finance bill begins with the hearing of the First President of the Court of Auditors during the month of September.

After hearings with ministers, the Committee for Cultural, Family and Social Affairs examines the social security finance bill in the same way as other bills. The general discussion is followed by the examination of the articles along with the amendments tabled in committee. The latter finishes its work with a vote on the whole bill.

The examination of the social security finance bill usually requires three or four meetings taking into account the number of amendments to examine (220 for the 2007 social security finance law).

With the help, in particular, of the Government replies to their questionnaires, the four rapporteurs each write one section of the report on the bill. An additional section contains a comparative table (initial provisions, the bill and amendments adopted) as well as the list of the amendments not adopted by the committee.

3. – The discussion in plenary sitting

The procedures for the discussion of the social security finance bill are decided by the Conference of Presidents of the National Assembly. On the agenda of the National Assembly, it is traditional that the discussion of the social security finance bill should follow the passing of the first part of the finance law.

The discussion in plenary sitting usual takes up four days of sitting. Although it follows the usual rules as regards the discussion of bills, the bill is dealt with in a specific way when it comes to the order of the votes on its different parts. In fact, article L.O. 111-7-1 of the Social Security Code sets out an order of voting which makes provision, in particular, that the fourth part of the bill for the year which includes the provisions concerning the expenditure for the coming year, can not be discussed before the passing of the third part which includes the provisions relating to revenue and the general balance for the same year. In addition, the National Expenditure Target for Health Insurance, although divided into five sub-targets, is subject to a single vote.

4. – The parliamentary “shuttle” and the promulgation of the law

As the emergency procedure is applied, as of right, to the social security finance bill, it becomes the subject, after its first reading in the Senate within the time limit of twenty days, of a meeting of a joint National Assembly/Senate committee (CMP) which is responsible for examining the provisions which remain under discussion. The procedure followed in the case of a successful joint National Assembly/Senate committee (i.e. the drawing-up of an agreed bill) or its failure, is the normal one applied to all bills.

Before its promulgation, the social security finance law is usually submitted to the Constitutional Council for its opinion, if a referral, as is usually the case, has been made. The Constitutional Council has developed a substantial jurisprudence and is particularly vigilant concerning the respect of the limits of the social security finance laws and the priority of the National Assembly concerning the examination of the new measures proposed by the Government in the framework of financial laws.