Mutual termination agreements: unemployment benefits to be reduced from September 1, 2026
21 August 2026 · 4 min reading time
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From September 1, 2026, an individual mutual termination agreement will entitle employees under the age of 55 to a maximum of 15 months of unemployment benefits and other employees in mainland France to 20.5 months. The monthly benefit amount will remain unchanged.
What will the 2026 mutual termination reform change?
The law of June 11, 2026, reduces the maximum unemployment benefit period for employees whose permanent employment contract ends through an individual mutual termination agreement.
Until now, these employees were entitled to the same maximum benefit periods as people who had been dismissed or whose fixed-term contract had ended. From September 1, specific rules will apply to mutual termination agreements.
The reform does not remove the right to unemployment benefits. Employees who meet the eligibility requirements will still be able to receive the return-to-work allowance, known in France as the ARE. The change concerns the period for which this benefit may be paid.
How long will unemployment benefits last after a mutual termination agreement?
In mainland France, the new maximum periods will depend on the employee’s age on the date their contract ends.
| Age when the contract ends | Current maximum period | Maximum period from September 1, 2026 | Difference |
|---|---|---|---|
| Under 55 | 18 months | 15 months | 3 months less |
| 55 or 56 | 22.5 months | 20.5 months | 2 months less |
| 57 or over | 27 months | 20.5 months | 6.5 months less |
Employees aged 57 or over will therefore be the most affected by this reduction, with a difference of up to six and a half months.
These figures correspond to the maximum unemployment benefit periods. The actual duration of an individual’s entitlement depends in particular on their employment history before their contract ended. Someone who worked for a shorter period will not necessarily be entitled to the maximum applicable to their age group.
A possible extension for employees aged 55 and over
Jobseekers aged 55 and over will be able to apply for an extension of their unemployment benefit entitlement.
This extension will not be granted automatically. France Travail will assess each situation individually and inform eligible people of the steps they need to take.
Longer benefit periods in France’s overseas territories
Different maximum periods will apply to benefit recipients living in France’s overseas territories, excluding Mayotte:
- a maximum of 20 months for people under the age of 55;
- a maximum of 30 months for people aged 55 or over.
Unlike in mainland France, these new periods are longer than the previous maximum periods indicated by Service-Public for the territories concerned.
Will the amount of unemployment benefit decrease?
The reform will not reduce the amount of the ARE. It will continue to be calculated based on the income received before the employment contract ended.
For example, an employee under the age of 55 receiving €1,200 per month in unemployment benefits will continue to receive the same monthly amount. However, their maximum benefit period will decrease from 18 to 15 months if they remain unemployed until their entitlement is exhausted.
In this example, three months of benefits represent a total reduction of €3,600 over the entire period. However, this difference only applies if the person does not find another job before their entitlement ends.
Which mutual termination agreements will be affected?
The new rules will apply to individual mutual termination agreements whose effective contract end date falls on or after September 1, 2026.
The date on which the agreement is signed will therefore not be enough to determine which rules apply. An employee who signs their agreement in August but whose permanent employment contract ends in September will be subject to the new system.
Conversely, a termination that takes effect no later than August 31 will remain subject to the previous maximum periods.
This measure will also apply when unemployment benefit entitlement is renewed following a mutual termination agreement falling within its scope.
Dismissals, the expiry of fixed-term contracts and collective mutual termination agreements will not be affected by this specific reduction.
Will the termination payment made by the employer change?
The reform will not change the rules governing the specific mutual termination payment.
This amount, paid by the employer when the permanent employment contract ends, will continue to be negotiated between the parties. It cannot be lower than the applicable minimum payment, whether this is the statutory amount or the amount provided for by a collective bargaining agreement when the latter is more favourable.
Two types of payment must be distinguished:
- the mutual termination payment, paid once by the employer;
- unemployment benefits, paid by France Travail when the employee meets the eligibility requirements.
However, a termination payment exceeding the statutory minimum may result in a waiting period before benefits are paid. In this case, the first unemployment benefit payment will be made at a later date.
What should you check before signing a mutual termination agreement?
The first point to check is the employment contract end date. This determines whether the previous or new maximum benefit periods apply.
It is also advisable to estimate the unemployment benefit amount, the expected duration of the entitlement and any waiting periods before the first payment. The payment offered by the employer should also be compared with the statutory minimum or the minimum set by the applicable collective bargaining agreement.
The procedural timetable also requires careful attention. After the agreement has been signed, both the employer and the employee have a 15-calendar-day withdrawal period. The application must then be approved before the termination of the employment contract can take effect.
These different stages may delay the end date of the permanent employment contract and change the unemployment benefit rules that apply.
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