Pension Black Hole: French Report Reveals Hundreds of Millions Paid Abroad

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ER Editor: The massive failure of a massive, unwieldy bureaucracy.

This Remix News report comes at the problem from a different angle —

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Pension Black Hole: French Report Reveals Massive Foreign Payments

If mass immigration continues, social security fraud will have a bright future ahead of it.

HELENE de LAUZUN for EUROPEAN CONSERVATIVE

As the French prime minister prepares to announce new measures to try to control the public deficit, a report by the Court of Auditors reveals an obvious area for savings: tens of millions of euros in pensions paid unduly to foreign citizens—without any checks.

The alarm was raised in 2017 by this institution responsible for monitoring public accounts. At the beginning of Emmanuel Macron’s first term, the annual report scrutinising social security expenditure revealed massive fraud in pensions paid abroad and called for greater vigilance on the part of the administration.

Eight years later, progress has been made, but remains largely insufficient, despite government communication campaigns—particularly at the time when the young Macronist talent Gabriel Attal held the position of Minister for Public Accounts.

The figures are alarming.

Approximately 1.1 million pensioners receive pensions outside France through the general social security system. In 2021, €43 million in pensions were wrongly paid abroad, representing 28% of the total amount of errors made by the social security administration’s old-age branch, even though pensions paid abroad account for less than 3% of benefits paid. These figures therefore mean that the error rate for beneficiaries abroad is much higher than the overall error rate in the allocation of pension benefits. The countries concerned are Algeria, Portugal, Spain, Italy, Morocco, and Belgium. Unsurprisingly, Algeria accounts for 31% of pensions paid abroad.

There are several types of fraud. Identity theft allows individuals to claim the pension rights of another person. There is also residence fraud, when the move abroad is not reported to the authorities, allowing, for example, a recipient of the minimum old-age pension to continue receiving their benefits even though they are no longer resident in France—which is illegal. However, by far the most common type of fraud is failure to report a death: beneficiaries continue to receive the pensions of insured persons who have died. The Court of Auditors estimates that this type of death fraud amounts to between €40 million and €80 million in Algeria alone.

Since 2021, a more effective identity verification system has been put in place for nationals of certain European countries. However, the system does not exist for the three Maghreb countries that provide the largest contingents of beneficiaries—Algeria, Morocco, and Tunisia. In these countries, identity checks at consulates have been introduced with some success, although the procedure is long and tedious. In 2023, 300 unreported deaths were identified in Algiers, amounting to nearly €1 million of unduly paid sums.

Despite these encouraging signs, there is still a long way to go before these expenses can be brought under control. The Court of Auditors is alarmed that the French administration is unable to estimate the total amount of fraud and that it has not given itself the means to recover unpaid contributions or punish those responsible. The issue of pensions paid abroad is thus representative of other areas of failure in the management of the state, such as the expulsion of foreign criminals, the control of illegal entry into the country, and the payment of social benefits to foreigners. The national Right has been calling for action on these issues for years, to no avail.

The administration’s failure to control this fraud is all the more worrying given that some voices in the public arena are calling for more immigration to support the “French social model”—a social model that is based precisely on the generous payment of uncontrolled social benefits. (ER: Which, we have noted, keeps people down. Social systems of payments from the Left were never designed to lift people up.) There is a certain inconsistency in calling for more immigration when one of the consequences of this policy will be to increase the risk of pension fraud when immigrants who have come to work in France return to their countries of origin. Without adequate tools to prevent this, and with limited enrichment for the host country, the so-called ‘enrichment’ put forward by the progressive think tank Terra Nova, which published a report in favour of immigration a few days ago, is all just smoke and mirrors.

Under constant pressure from the public deficit, Prime Minister François Bayrou is preparing to launch a new plan to “restore balance” to public finances, which is to be presented to the French people by the beginning of July. The introduction of a ‘social VAT’ is once again being discussed by the executive. Unfortunately, however, the fight against social fraud and the wasteful payment of benefits to foreigners does not seem to be on the agenda.

Source

Hélène de Lauzun is the Paris correspondent for europeanconservative.com. She studied at the École Normale Supérieure de Paris. She taught French literature and civilization at Harvard and received a Ph.D. in History from the Sorbonne. She is the author of Histoire de l’Autriche (Perrin, 2021).

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Featured image source, Court of Auditors: https://www.euractiv.com/section/politics/news/court-of-auditors-asks-france-to-better-control-consultancy-services/

Featured image source, 500 euro bills: https://www.politico.eu/article/court-of-auditors-eu-payments-to-balkans-could-be-reduced-allocation-misspending-rule-of-law-projects/

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