Adapted collection mechanisms Inn ovations for independent workers’ social

64 France – Social security coverage of independent workers in the schemes RSI and MSA The RSI also developed a series of online services for members access to payment history, benefit history, pension calculation, etc. and advisory services for entrepreneurs Box 2. A new status for enterprise creation: the Auto-entrepreneur In 2008, the French government passed a law on the modernization of the economy 11 , which included the creation of a new status for entrepreneurs: the auto-entrepreneur. Auto-entrepreneurs are independent workers working either in trade or service provision or, to some extent, liberal activities with a turnover lower than 81 500€ for trade activities or 32 600€ for services provision. Above those limits, the status changes and falls into other legal status for companies and independent workers. Auto-entrepreneurs are subject to specific taxation and social contributions. Registration to social security is mandatory for auto-entrepreneurs, and most of them have to register to the RSI excluding liberal professions, except for health. Still, people who are in parallel salaried workers keep their health insurance and register only for the other benefits. Contributions, contrary to what applies to the rest of independent workers, are fixed as a package in percentage of revenue: - Auto-entrepreneurs in trade sectors: 12 per cent; - Auto-entrepreneurs in service provision: 21.3 per cent. Auto-entrepreneurs even have the option of paying a global package as percentage of their revenues that includes both social contributions and income taxes, which is an important innovation that greatly facilitates the accounting in the business creation phase. Auto-entrepreneur is a flexible independent worker status that aims at facilitation enterprise creation. For instance, this status is compatible to some extent with salaried work. In many ways, it can be viewed as a tool for formalization of work that was previously undeclared for various reasons complexity of procedures, incompatibility with other sources of declared revenues, etc., especially in services housekeeping, gardening, etc. This initiative has been very successful in terms of enterprise creation since its launch. In 2011, it had more than 700,000 registered entrepreneurs who were active. In 2010, auto-entrepreneurs represented 25 per cent of RSI contributors, even though only half of them declared revenues and thus actually paid. Source: Le portail des auto-entrepreneurs, 2012.

10.4. Challenges ahead

It should be underlined that the creation of the RSI has brought major innovations with the aim of improving services affiliation, contribution collection and benefit provision. However, many of its initial objectives are yet to be achieved, as it has been faced with many challenges that have delayed the operational effectiveness of the merger, thereby affecting quality of provided services: ■ The political context has been difficult, since a multiplicity of reforms to social benefits at the national level were hard to put in place while simultaneously merging existing schemes pension reforms, health insurance reforms. ■ The success of the auto-entrepreneur status has resulted in a substantial increase in affiliations. ■ The merger of information systems was more complex than anticipated and could not be fully completed, especially given the considerable pressure caused by the above factors. 11 Loi n. ° 2008-776 of August 4 2008 on the modernization of the economy. Innovations in extending social insurance coverage to independent workers 65 ■ The absence of a merged information system within the RSI and efficient data base exchanges between the RSI and the entities that had delegation for contribution collection resulted in difficulties and delays in establishing the ISU. ■ There was a subsequent loss of quality in service provided to clients, delay for affiliations, delay for closing transactions for example, pensions were back to be calculated manually at some point. ■ These challenges have been taken into account and subsequent difficulties should be resolved in coming years, but they illustrate the difficulty of merging social protection institutions and networks, especially as far as information systems are concerned. Regarding the MSA, the demographic constitution of its target population has a strong impact on its peculiar culture and on its financing mechanisms. Indeed, due to massive urban drain linked with a tremendous increase in labour productivity related to mechanization, farmers are less and less numerous in France. In fifty years, the MSA has lost a million affiliated independent farmers.