To be debated in Parliament: a plan to cut the cap of 4400€ tax free allownce on French taxable pensions down to 3000€…
As it is calculated to save the State 1.4Bn€, I guess it will sail through with little opposition.
It was probabaly only a matter of time before this little nugget of joy was attacked.
I don’t want to sound like I’m alright Jack but that will not trouble me in the least.
A friend was in touch yesterday, saying we were all going to be paying far more tax next year on our pensions and that I should just keep working.
Apart from the planned cut in the abattement cap to €3000, is there anything else in the offing as regards pensions? I suspect my friend is talking through her arse.
Le Monde had a big section showing all the points up for debate. As far as I could make out, for pensions, it was reducing the tax free allowance. A pension under 30k will not be touched, but a pension of 44k odd and more, will now have to pay their underlying rate of tax on an extra 1400€ - which is not insignificant.
George is no doubt analysing it better and might be along shortly.
The French government is hoping to save €5.5bn by under-indexing certain pensions (€4.1bn) and reducing the 10% pensions abattement by about one third, which as Adam1 has said above is estimated to save €1.4bn. The government claims that that this abattement has increased by 60% over 15 years, ie it thinks it’s about time to end that particular trajectory. They also believe that it will only affect the 50% of pensioners who actually pay income tax (no doubt true). In addition the government believes the reduction will only have a marginal effect on the better off pensioners, for whom the abattement has relatively little impact, proportionate to their overall pension income.
Lets wait and see what actually happens. With a minority government very difficult to predict what happens in the end..