13 Nov 2006

French audit office proposes ending state pension bonus for overseas territories

5:40 am on 13 November 2006

A French government audit office has proposed an end to the state pension bonus given to those living in overseas territories, such as New Caledonia and French Polynesia, because of its alleged unfairness and high costs.

The AFP news agency says last year, France spent 320 million US dollars to pay a 35-percent bonus on top of the pensions of more than 30,000 public servants and military veterans overseas.

The recipients are entitled to the boost if the live in an overseas territory for more than 325 days a year, but officials say the movement of these retirees is difficult to check and the system is open to abuse.

According to the audit office, 83 percent of these special beneficiaries in New Caledonia and 59 percent of them in French Polynesia were born in France.

It says their number is growing by 10 percent a year which has implications for the budget.

The bonus on pensions was introduced in 1952.

Indexation still exists for French public servants whose pay is doubled if they work in the French Pacific territories to compensate for the distance away from France.