Good news for your purchasing power if you are retired: you could see a compulsory contribution drop or even disappear completely next year under certain conditions.
In 2025, retirees could benefit from a favorable measure in terms of social security contributions. Indeed, under certain conditions, they could be completely exempt from the general social contribution (CSG). However, this exemption is not automatic and depends on several criteria, in particular income received two years previously, that is to say in 2023. The CSG, which finances social security in particular, is an essential levy for many retirees, but the good news is that some of them could see their burden reduce.
The CSG is a progressive tax whose rate varies depending on income. Currently, the rates applied to retirement pensions range between 0% (for the lowest incomes) and 8.3% for the highest pensions. To determine the rate applicable in 2025, the tax authorities will be based on the reference tax income (RFR) of 2023. Each household is assigned a rate according to this income and its composition. More precisely, this income will be compared to thresholds which, good news for some, will be reevaluated next year due to inflation.
The income thresholds which determine the CSG rate will thus be increased by 4.8% in 2025. This means that if your income remains the same, you could move to a lower tax bracket, or even be completely exempt. For example, for a retiree living alone, the exemption threshold will increase from 12,017 euros to 12,817 euros. If you go slightly over this threshold, you could be subject to the reduced rate of 3.8% instead of the usual 6.6% or 8.3%. A simple consultation of your 2024 tax notice will allow you to check if you are affected by these adjustments.
For those who saw their income decline in 2023, the new installments could provide a welcome reprieve. On the other hand, those whose income has increased will only be penalized after two consecutive years of exceeding the threshold. This rule aims to avoid excessively abrupt threshold effects which could increase the tax burden disproportionately.
In addition to the CSG, this exemption also impacts other social contributions such as the contribution for the repayment of the social debt (CRDS) and the additional solidarity contribution for autonomy (CASA). Retirees who are exempt from CSG will also be exempt from these two contributions, thus further reducing their tax burden.
For retirees, the prospect of this exemption in 2025 represents a welcome financial relief. If it is therefore essential to check your 2023 income, this revision of the thresholds is an opportunity for those whose pensions are modest to see their situation improve next year.