Question 7807 — elderly people

Summary

In accordance with the commitments of the President of the Republic and the Government, the finance bill as well as the social security financing law for 2018 include a set of measures intended to support the purchasing power of workers, both self-employed and employees, through the gradual elimination of personal contributions. In order to guarantee the financing of this unprecedented redistribution effort in favor of assets, the rate of generalized social contribution (CSG) will increase by 1.7 points on January 1, 2018 on earned, replacement and capital income, with the exception of unemployment benefits and daily allowances. As of January 1, 2018, a portion of retirement pension beneficiaries will contribute more to intergenerational solidarity. These are pensioners whose income is above the threshold allowing the application of a full CSG rate, i.e., for a single person whose income consists exclusively of their retirement pension, to a net income of 1,394 euros per month. The increase in the CSG rate will be fully deductible from the income tax base and will, consequently, lead to a reduction in taxes for households. The CSG rate paid by these retirees, 8.3% from January 1, 2018, will remain lower than that applicable to earned income, 9.2%. The lowest-income pensioners, including beneficiaries of the solidarity allowance for the elderly, will remain exempt from social security contributions. Other pensioners, whose net income is less than 1,394 euros per month, will remain subject to CSG at the reduced rate of 3.8%. Thus, in total, 40% of retirees will not be affected by the increase in the CSG rate. With this measure, the Government reaffirms the principles of universality and solidarity which govern the social security system in France. These principles imply that beneficiaries of retirement pensions contribute, in the same way as all socially insured persons, to the financing of social protection. All policyholders are thus liable for the CSG, which is a universal, effective and distributive tax to finance the universal social security benefits, in particular health insurance expenses for reimbursements of medicines, community medicine and hospitalization costs, to which the CSG relating to replacement income is exclusively allocated. Furthermore, retired households will benefit from purchasing power measures proposed by the Government. Retirees will benefit from the elimination progressive housing tax which will allow 80% of households to be exempt from it by 2020, when their net income is less than 2,400 euros net. The Government wishes to reduce this tax, which constitutes a particularly heavy tax burden on the budgets of households belonging to the middle class, particularly those residing in municipalities with the least economic activity in their territory. The amount of the tax will drop by 30% from 2018 and they will stop paying it in 2020. Ultimately, each beneficiary household will make an average saving of €550 per year. Thus, two thirds of retirees will not see their purchasing power drop, either because they are not affected by the increase in the CSG, for 40% of the lowest-income retirees, or because they benefit from the progressive exemption from housing tax. Finally, the most retired poor people will benefit from the increase in the minimum retirement age of €100 per month. Thus the amounts of the solidarity allowance for the elderly and the supplementary old-age allowance will be increased to €903 per month in 2020, compared to €803 currently. The old-age minimum will increase by €30 on April 1, 2018, then by €35 on January 1, 2019 and by €35 on January 1, 2020. This strong measure of solidarity, representing a effort estimated at €525 million over 3 years, will benefit the 550,000 retirees already receiving the old age minimum and should contribute to increasing the pensions of 46,000 additional retirees.

Machine translation from French. The official text remains authoritative.

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