Towards the big return of this tax advantage for retirees? What to expect

Towards the big return of this tax advantage for retirees? What to expect
Towards the big return of this tax advantage for retirees? What to expect
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Rarely has the financial health of retirees been so much at the center of debate. It must be said that Michel Barnier inflamed the issue by speaking of a postponement of the revaluation of basic pensions. He wants a six-month postponement to save money.

Like other taxpayers, retirees pay taxes. However, in the future they could benefit from a tax advantage that has not existed for years. Indeed, Wednesday October 23, 2024, MPs voted in favor of reinstating the half-tax share for surviving spouses.

Retirees: good news for their taxes

On October 23, of the 155 deputies present, 96 voted for the restoration of the half tax share for widows and widowers in the National Assembly. This return could reduce the tax burden on low-income retirees, although its final adoption still remains uncertain.

The restoration of the half-tax share, abolished in 2014, is a measure particularly awaited by many low-income retirees. Indeedthe removal of this tax advantage led to tax increases for surviving spouses. This obviously made managing their budget more complex.

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Following the vote in parliamentary session on October 23, this system could come back to support widows and widowersa change that would potentially affect a large part of the French population.

What advantage does the half tax share represent?

The return of the half tax share would allow surviving spouses to maintain the tax advantage of their deceased spouse. So, this return reduces their tax burden. Currently, only survivors of veterans or those who have raised a dependent child for at least five years receive this benefit.

The possible reform aims to expand this access to other categories of surviving spouses, although its application remains conditional on parliamentary approval. The National Assembly wishes to generalize this tax advantage for low-income retirees.

According to several MPs, the 2014 removal particularly affected low-income widows and widowerswho now find themselves subject to the CSG and the CRDS, with the consequence of tax increases and increased debts in property and housing taxes.

A significant budgetary cost

The return of the half tax share would have an estimated cost in billions of euros, which could constitute a barrier upon its adoption due to the government’s efforts to contain the budget deficit.

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Indeed, Michel Barnier’s government is seeking to make savings. As such, the Prime Minister seems to see a target in place of retirees. Indeed, it is he who suggests the postponement of the increase in pensions.

In order to make 4 billion euros in savings, he wants to move this revaluation from January to July. It would thus deprive retirees of six months of revaluation. In addition, the change in July would be less significant than that in January. Seniors will therefore be the big losers.

But the deputies of the National Assembly do not hear it that way. They then propose alternatives so as not to sanction the most precarious. For example, NFP deputies believe that it is possible to target the richest seniors in the country.

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