Inflation allowance. Who can benefit from it? When will it be paid?

For several days, the Government hesitated on the nature of the aid to be put in place to help the French cope with the rise in fuel prices, among other products currently subject to high inflation. He said to himself that the executive hesitated between lowering taxes at the pump and a “fuel check” on the model of the “energy check”; it will ultimately be neither since the expected boost will take the form of “inflation compensation”. This will not be exclusive to fuels and can therefore be used for various and varied purchases, such as materials or food products, some of which have seen their prices inflate over the past few weeks. This compensation will not be paid at the same time to all the people who are eligible for it.

Inflation compensation: for whom?

The inflation allowance amounts to € 100 per person and must be paid at once. To be eligible, you must earn less than € 2,000 net per month as an individual. Several members of the same tax household can therefore benefit from it. This income limit was chosen because it represents the median salary in France according to the Prime Minister, Jean Castex. The Government says it wants to pay this sum quickly to the beneficiaries, who do not have to take any steps to receive it. The categories of eligible persons are as follows:

• employees
• self-employed
• retirees
• tax-independent students
• scholarship students
• jobseekers

Inflation compensation: for when?

As the compensation payment channels vary according to the activities of the beneficiaries, not all of them will receive their € 100 at the same time. It is expected that private sector employees will receive it at the end of December 2021 on their payslip, paid by their employer. Officials are supposed to receive it in January 2022. The other people concerned will receive their compensation a little later, on dates to be set in the coming days according to Matignon. Payment will go through the pension funds for retirees, URSSAF for the self-employed, the MSA for farmers, or even Pôle Emploi for job seekers.

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Aid partly financed by taxes

According to official calculations, the price of a liter of fuel increased by 9 euro cents between the 2018-2019 average and the current period, i.e. an annual additional cost of € 57 for a unleaded motorist and € 79 for a diesel user. The inflation compensation will benefit 38 million French people according to the Government. It therefore costs 3.8 billion euros to the State. Of this sum, one billion euros is financed by the increase in VAT receipts due to the increase in prices. Taxes represent about 60% of the price of fuel.

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