A rise in the CSG social charge is included in next year’s social security law, which has now been voted through by MPs, but was being debated by the Senate on going to press. As usual, the law will be subject to a final vote in December. Here are some of the key changes planned:
- The CSG which is the largest of several social charge taxes which are levied on many kinds of income is to rise by 1.7%, taking total social charges on investment and capital income to 17.2% (from 15.5%). This applies to French rental income and property Capital Gains.
The rise will be partly offset by the fact that the amount of extra charge can be ‘deductible’. Part of the CSG is already deductible, meaning an equivalent sum can be deducted from income declared in the following year’s tax declaration (it is usually filled in on the form automatically).
CSG is also levied on French salaries and certain pensions (not UK state ones) and the increase means a total rise in social charges from 7.4% to 9.1% on pensions, however people with small pensions who benefit from a lowered rate of CSG will not be subject to the rise.
Pensioners are expected to bear the brunt of this more than employees because employees are to benefit from reductions on the cotisations they pay on work income for healthcare and unemployment insurance. These are set to come in in two stages, on January 1 and October 1, and represent for someone on the minimum wage, an extra €132 in 2018 and €263 in 2019.
- The law includes an increase in money for helping pay for childcare, complément mode de garde (CMG), which could be as much as an extra €138/month for those on low incomes. However the boost is only for single parent families. At the same time a reduction (from €8 to €16/month depending on individual factors) is planned in the amount of the PAJE benefit which is paid out to parents of new babies, applicable to children born or adopted from April 1, 2018. The ceiling for obtaining the highest rate of PAJE is also to be lowered.
- Aspa, the pension top-up benefit, is to be gradually increased by €100/month in three stages – €30 in April, €35 on January 1, 2019 and €35 in January 2020.
- A tax on fizzy drinks is to rise by variable amounts depending on the drink’s sugar content.
- Further increases in the price of cigarettes are planned, with the average price to reach €10 by 2020. It will increase by one euro in March 2018.
- The forfait hospitalier daily hospital charge will rise from €18 to €20. It should be covered by top-up policies (if you have one).
- As expected, the RSI body which manages the social cotisations of the self-employed, is to be abolished as of January 1, with changes for those affected to be phased in over a two-year period.
- The roll-out of the tiers payant system for health reimbursements (meaning no up-front payment of the state-reimbursed part of a fee) has been indefinitely put off, but a report on the subject is due by March 31.