Financial Fragility

“Aide-Budget”, a new scheme to prevent household over-indebtedness

Publié le null - Directorate for Legal and Administrative Information (Prime Minister)

While over-indebtedness affects a large number of households, a new prevention and support scheme, known as

Budget Aid

, is being tested in 11 departments prior to deployment across the country. Service-Public.fr gives you an overview of them.

Image 1
Image 1Crédits: Wayhome Studio - stock.adobe.com

Over-indebtedness affects many households in France, with 113,000 applications filed in 2022, according to the Banque de France. It particularly affects single adults and women, especially when they are heads of single-parent families. In this context, the new mechanism

Budget Aid

is tested over a period of 12 months in 11 departments, in mainland France and overseas:

  • North;
  • Isère;
  • Paris;
  • Seine-Saint-Denis;
  • Dordogne;
  • Hérault;
  • Lower Rhine;
  • Côtes-d'Armor;
  • Haute-Savoie;
  • Seine-Maritime;
  • Reunion.

FYI  

The initiative of this mechanism is based on a common approach to prevention, which involves different actors: public authorities, energy suppliers, social donors and the network of Budget Advisory Points (PCBs).

The Banque de France supports experimentation, as part of its public service missions for individuals facing financial difficulties.

What is the ‘Aid-Budget’ scheme?

It is a “comprehensive early warning and monitoring mechanism for situations of financial fragility,” the government press release states. The main objective is therefore to prevent over-indebtedness: to identify the possible financial difficulties of households at an early stage and to offer them personalized support.

Budget Aid

allows:

  • identify early on any financial deterioration in a household;
  • provide budget support adapted to the needs of the household (support for the preparation of a debt distress case) through the mobilization of 60 dedicated budget advice points (out of the 500 labeled);
  • to strengthen the link between the various actions to be taken in terms of prevention, by both private and public actors.

How does it work?

Until now, anyone facing a debt distress situation could lodge a complaint with the debt distress commission by filing a file with the Banque de France. This committee proposes solutions adapted to each situation (rescheduling or debt cancelation).

In addition, Budget Advisory Points (PCB), established in 2019, offers confidential, free and personalized budget management advice. They support people who want to improve the management of their budget, cope with a difficult financial situation or anticipate a change of family or professional situation. There are now 500 labeled Budget Advisory Points.

With

Budget Aid

Finally, financial difficulties (unpaid for example) need to be detected even earlier, thanks to cooperation between social donors and energy suppliers. The aim is to propose an accompanying solution at an early stage, launched automatically with the help of the Budget Advisory Points.

Find a Budget Tip Point in your area.

Reminder

The National Institute of Consumer Affairs (INC) offers you a simulator to calculate your budget.

FYI  

The project was coordinated by the Ministry of Economy, Finance and Industrial and Digital Sovereignty, and developed in consultation with several ministries and institutions: the Ministry of Solidarity, Autonomy and Persons with Disabilities, the Ministry of Energy Transition, the Interministerial Delegation for the Prevention and Fight against Poverty, the Interministerial Delegation for Housing and Access to Housing, the Banque de France, and various actors in the energy (EDF, Engie, TotalEnergies) and social housing sectors (Union sociale pour l’habitat, Adoma-CDC Habitat).

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