Therefore,
Here people who will benefit:
The new lump sum reduction for retirees should above all benefit the least affluent households. For example, The calculation method chosen by the government could however make a big difference.
Who will win against the new lump sum reduction of 2,000 euros for retirees? Nevertheless, Announced by the government for the 2026 budget. Consequently, this measure, which must replace the 10% reduction for professional costs, could “largely” benefit the least affluent.
Currently, the amount deducted corresponds to 10% of retirement pensions, with a maximum of 4,399 euros (for income from 2024). According to the calculations of the Institute of Public Policy (PPI). the application of the new reduction should be without impact for tax households with 20,000 euros in annual pensions (40,000 euros for a couple).
On the other hand, it should be more interesting for those who are below this threshold. “They will have here people who will benefit income considered as lower. which open up to pay less taxes and to receive more social benefits, while it will be the opposite for tax households receiving more than 20,000 euros,” detailed the PPI.
Two different calculation options – Here people who will benefit
This would result in 1.5 million winners (9% of retirees) among the least affluent, thanks to social benefits, against 1.4 million losers (8%) due to the wealthy tax increase.
Data could however make a big difference: for the time being we do not know if the new allowance will also apply to the calculation of housing aid. as is the case with that which currently benefits from retirees.
This point is crucial according to the PPI since the measure will be “strongly redistributive while allowing an improvement in the budgetary balance of around 550 million euros”. if “the new reduction modality” is applied “both to the calculation of income tax and that of housing aid”.
here people who will benefit
Conversely. “an application only to the calculation of income tax would lead to revenue almost twice as large (around one billion euros), for a lesser redistributive effect and a large majority of losers to the reform”.
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