Many residents could end up paying more tax and face higher healthcare costs under the first proposals for the 2026 budget, aimed at saving €44billion.
The plans include freezing state spending at 2025 levels, scrapping tax breaks, and cutting public jobs. Some workers could also lose two bank holidays.
Prime Minister François Bayrou said the proposals are “only the preliminaries”, and a deeper overhaul is needed.
“I think we’re at the last station before the cliff edge and being crushed by debt. It’s a mortal danger for the country,” he warned.
We look in detail at the plans – and how they could affect you.
Tax and money
Income tax brackets will be frozen in 2026, meaning 2025 income will be taxed using the same thresholds as in 2024. Anyone earning more next year will see their tax rise.
The 10% expenses deduction on pensions – similar to that for salaries – will be replaced by a flat €2,000 per household. Currently the maximum is €4,399, so most pensioners with moderate to high income will pay more.
Economy Minister Eric Lombard said this would affect those with more than €20,000 in pensions per year, helping to redirect support to lower earners.
Thresholds for reduced CSG rates (3.8% or 6.6%, instead of 8.3%) will also be frozen, pushing some pensioners into higher rates. This does not affect S1 holders with exemption on foreign pensions.
A new ‘solidarity contribution’ will target incomes over €250,000 per person or €500,000 per couple. Tax credits and reductions deemed poorly targeted will be reviewed and some scrapped.
More checks on tax, benefit and healthcare fraud are promised, with a dedicated law due this autumn. New savings products will be launched to support EU firms and innovation.
Pensions and benefits
State pensions and social benefits will remain at 2025 levels in 2026 – part of the so-called année blanche, or ‘white year’.
A new benefit – the allocation sociale unifiée – will merge existing income top-ups such as RSA and the prime d’activité. It could also incorporate some family or disability support.
Charities cautiously welcome this but warn simplification must not mean cuts.
Other changes will aim to improve pension rights for women who took time out for childbirth, and people in physically demanding jobs.
Healthcare
Healthcare is set for major changes, affecting most patients.
The annual cap on franchises médicales – €1 per medicine or act, and €4 for transport – will double to €100.
The €2 participation forfaitaire per consultation will also have its cap doubled.
These amounts will now be paid upfront rather than taken off future reimbursements, to make them “more visible”. The aim is to reduce overuse, especially of antibiotics – France uses twice as many as Germany.
People under long-term illness status (ALD) – around 20% of the population – will no longer get 100% reimbursement for treatments not directly linked to the illness.
They may be asked to leave the scheme if their condition no longer justifies inclusion.
Digital medical records (DMP) will become compulsory, and doctors must use them. Bayrou said this would allow “giant leaps in diagnosis and prevention” when paired with AI.
Other changes include better re-use of unused medical equipment, expansion of vaccination campaigns, and reform of sick leave rules. Most long-term sick leave (30+ days) will now be signed off by GPs rather than specialists, to avoid delays.
Work and bank holidays
Two public holidays will become normal working days – possibly May 8 and Easter Monday. Bayrou said May was a “Swiss cheese” of holidays, and Easter Monday had “no religious significance”.
Employers may face a new levy in return for the added productivity.
Unemployment benefits may also be reformed. Ideas include restricting ruptures conventionnelles (mutual terminations), limiting appeals, and shortening the payment period.
Employees may be offered pay bonuses for giving up part of their paid holiday (e.g. fifth week), and part-time and flexible work rules will be adjusted to favour workers – especially women.
An AI strategy (Osons l’IA) will aim to boost productivity across sectors, and more employee representation in company decisions is planned, including in small businesses.
Public sector jobs
At least 3,000 public jobs will be cut in 2026, with only one in three retiring civil servants replaced from 2027–29.
All sectors will be reviewed – including teachers and police – though trainee teaching roles are protected.
There will be no inflation-linked public sector pay rises next year, though promotions will still bring increases.
Other proposals
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Bureaucracy: Businesses will be consulted on “freedoms” they want in return for reduced support. A 1% turnover fine is planned for late payers, to help small firms.
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China parcel tax: Parcels under €150 from outside the EU – often used to avoid customs fees – will be taxed.
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Defence: Extra spending will fund new gendarmerie brigades and fire-fighting Canadairs.
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Families and ageing: A national ‘infertility plan’ will encourage childbirth. More flexible parental leave is planned by 2027, and more support for older people’s home adaptations.
A work in progress
The budget plan is not final. Key measures must be approved by parliament before the end of the year as part of the 2026 Finance Law.
It has already been criticised by both left and far-right.
“All ideas for improvement will be welcome,” said Bayrou. “But this must not mean going backwards. The government has an obligation to get results.”
He added that France must find new ways to fund its social security system so that less comes from taxes on work – and encourage people across the EU to “buy European”.
