which retirees will be exempt in 2025, with the new thresholds?

The CSG thresholds will be reviewed in 2025, as every year, depending on inflation. Will your retirement pension be reduced by the CSG? Or on the contrary, will you be exempt or see your rate reduced? This of course depends on your income.

You should know that there are four generalized social contribution rates: the first of 0% (exemption), for the lowest pensions, a rate reduced to 3.8%, a median rate of 6.6% and a rate normal at 8.3%. To determine the rate that will be applied to your retirement, the tax authorities base themselves on your income for year N-2. So for 2025, it will be your income for the year 2023 which will be examined, and more precisely your reference tax income, which takes into account the composition of your household.

Why do we pay the general social contribution (CSG)?

The CSG is one of the 3 social contributions (with the CASA and the CRDS) applied to the retirement pension, and which is used to finance social protection. All earned income as well as replacement income such as retirement pensions or unemployment benefits, as well as property income and investment income are subject to it.

What are the new CSG thresholds?

The thresholds for determining the CSG rate will change by 4.8%, as much as the increase applied to pensions in 2023. And therefore, with a identical income (RFR), you could change bracket and see a lower CSG rate applied to you, or even be exempt from its payment. Here is the summary table, according to your RFR and the composition of your household.

Good to know! If your income has decreased and you change the threshold downward, the new rate will be applied to you. On the other hand, if your income has increased and causes you to change your threshold upwards, this change will only be applied in case of exceeding the threshold for two years in a row. A favorable provision, intended to limit the effects of thresholds.

HAS note: if you are in a relationship, but not married or in a civil partnership, and therefore youe do not have joint taxation, each member of the couple has their own RFR and therefore their own tax rate.

Who can be exempt from the CSG (and the CRDS) on their retirement pension?

A certain number of retirees can benefit from a total exemption from their social security contributions. Here are the three situations:

– Your reference tax income for year n-2 is below a ceiling, which varies depending on the number of shares in your tax household. Check out our chart above to verify this.

Or

– You are holder of the Solidarity Allowance for the Elderly (ex-minimum Old Age),‘Widowhood allowance or from Supplementary Disability Allowance (ASI).

Or

– You are domiciled for tax purposes outside France.

Is the CSG deductible from your taxes?

The general social contribution (CSG) which is levied on your pensions is partly deductible from your income tax. Indeed, if you are deducted at 3.8%, you can deduct it in full from your 2024 tax return; if you are levied at 6.6%, you can deduct 4.2%. Finally, retirees taxed at 8.3% have a deductible CSG at 5.9%.

What exemptions for CASA and CRDS?

It is not only the CSG that can be taken from your pension, there is also the CASA and the CRDS:

– If you are exempt from the CSG, then automatically you will be exempt from the CASA and the CRDS on your basic retirement pension, as well as from the health contribution on the supplementary pension.
– If you are subject to the reduced rate of 3.8%, then you will be exempt from CASA but not from CRDS on your basic pension. You will also be exempt from the health contribution on the supplementary pension.

Please note: CRDS and CASA are deductions that are not deductible from your income tax.