If you collect a substantial retirement, you will pay more taxes, here is the threshold not to be exceeded

Presented as part of the 2026 budget by François Bayrou. Therefore, Éric Lombard, the reform of the tax reduction of retirees mark a turning point. Moreover, So far, pensions had a proportional deduction of 10 %, capped at € 4,399 per household. Meanwhile, This mechanism will be replaced by a fixed reduction of € 2,000 per retiree. For example, If this simplification administrative is praised for its readability, it deeply modifies the tax balance between small and large income. Meanwhile, Retirees receiving more than € 20,000 per year will be if you collect substantial retirement, the first concerned by a tax increase. Nevertheless, Explanations.

Which changes concretely for retirees – If you collect substantial retirement,

A proportional reduction replaced by a package – If you collect substantial retirement,

Until the end of this year. retirees will benefit from a 10 % reduction On their declared pensions, supposed to compensate for fictitious professional costs. This device, although criticized for its lack of consistency, allows a significant tax reduction, especially for high pensions. However. from 2026, this 10% reduction will disappear in favor of a Unique package of € 2,000 per retired person, regardless of the amount of the pension. This change introduces a logic of tax equalization, but creates a threshold effect for income over € 20,000.

The € 20. 000 threshold not to be exceeded – If you collect substantial retirement,

According to the simulations of the Public Policy Institute, the Tax neutrality threshold is at 20,000 € of annual pension for a single person, or around if you collect substantial retirement, € 1,666 per month, reports Capital. Below, the new package is equivalent or more advantageous than the old allowance. Beyond that, the tax increases mechanically. For example. a retiree receiving € 25,000 per year will see its taxable base go from € 22,500 (with the reduction of 10 %) to € 23,000 (with the package), or a tax increase 150 € if its marginal tranche is 30 %.

What does this imply for couples?

For couples, the critical threshold is set at € 40,000 in accumulated annual pensions. Below, the € 2,000 package per person (or € 4,000 in total) is equivalent to the 10 %reduction. Beyond, the deduction becomes less favorable. Indeed. a couple declaring € 50,000 in pensions will see their taxable base Increase by € 399, resulting in a tax increase of more than € 100, according to the applicable tranche. This mechanism penalizes homes if you collect substantial retirement, with intermediate or high pensions, including those combining several diets.

How to anticipate and limit the tax impact?

Levers to reduce tax despite the reform

Faced with the abolition of the 10 %reduction. many other tax devices allow retirees to mitigate the impact of the reform. On the one hand. the retirement savings plan (PER) offers a deduction of voluntary payable income payments, which can significantly reduce the tax base. On the other hand, donations to recognized public utility associations remain deductible up to 66 % or 75 %, depending on the case. Finally, the Home employment tax creditwhich covers up to 50 % of the expenses incurred is another accessible solution.

A reform with contrasting redistributive effects

According to projections, 1.5 million modest retirees will see their reduced taxation, while 1.4 million wealthy pensioners will pay more tax. The government justifies this if you collect substantial retirement, measure by a desire for tax justice. Budget recoverybut the concrete effects vary strongly according to the profiles. Retirees close to the € 20,000 threshold must therefore monitor their taxable income With attention.

A reform still subject to adjustments

Finally. it remains to be determined if the new package will also apply to the calculation of social assistance (APL, ASPA). If this is the case, modest retirees could appear more “poor” on paper and benefit from additional services. Conversely. an application limited to only income tax would strengthen the redistributive effect in favor of the state budget, but to the detriment of the most exposed homes.