In order to help French nationals and residents deal with the economic hardship resulting from high inflation over the last quarter of 2021, the government has implemented an inflation allowance, i.e. an exceptional aid of 100 for the most vulnerable, to be financed by the State. The employer is required to pay the inflation allowance to eligible staff in December 2021 or by January 2022 at the latest.

This inflation allowance will be paid out to individuals who received average earnings of less than 2,000 net per month, before income tax, from 1 January 2021 to 31 October 2021, i.e. an average of 2,600 gross per month for the period. The amount of the allowance is 100 regardless of the duration of the contract, or if the contract is full time or part time. It is also due to employees who are absent from work (sick leave, maternity leave, etc.). The allowance is also owed to employees who have left the company prior to the date of the allowance payment, if they were employed in October 2021.

The allowance needs to appear on a dedicated line of the pay slip under the heading “Inflation allowance – exceptional state aid”. Recipients of minimum income or social benefits and replacement income (e.g. combined employment-retirement) who are also working will receive the inflation allowance from their employer (and not from the social welfare organisation.) In order to be reimbursed, Employers will include the total amount paid in their next monthly declaration to the URSSAF...

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