The government plans to remove the 10% automatic reduction from which retirees benefit from. To replace it with a fixed lump sum of 2,000 euros. With this new system, the tax threshold for a single person will evolve.
It was one of the main announcements of the François Bayrou budget savings plan, unveiled on July 15. It concerns retirees and their income tax: the automatic reduction of 10% (but capped at 4,399 euros) from which they have benefited since 1978 will be deleted.
Fortunately the impact of this deletion would be well limited since it would be replaced by another abatement. Who would be a lump sum: in the amount of 2,000 euros for a retiree alone, and 4,000 euros for a couple.
The non -tax threshold increases to 19,500 euros
This modification will not have a special impact for a majority of retirees: indeed, almost half of them is simply non -taxable. That is to say that their income makes them situate below the tax threshold, which is set for 2025 to 17,436 euros, reports the site Mes-Allocs.fr which is based on the content of the finance law of February 14, 2025. This corresponds to a monthly salary of around € 1,453.
And good news, the implementation of the fixed reduction of 2,000 euros would increase this non -taxation threshold. According to the newspaper of the Net, he would reach 19,500 euros, which corresponds to a monthly retirement pension of around 1,625 euros net.
For retirees with income less than 20,000 euros, the reduction of 2,000 euros is advantageous. Take the example of a single person with 18,500 euros. Currently, it has a reduction of 1,850 euros, which brings to 16,650 its taxable income. With the reform, its reduction will be greater (2,000 euros) and its even lower taxable income (16,500 euros).
Single people receiving more than 20,000 euros penalized
This increase in the non -taxation threshold will therefore make winners since it will bring people out of the tax. According to Sylvian Duchesne, an economist at the Institute of Public Policy (PPI) Author of a note on the subject, the reform becomes penalizing only beyond the threshold of 20,000 euros in income for a single person.
“All tax households which have amounts of pension below this threshold will see their reduction increase (they will therefore have income considered as lower, which open the right 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,” he summarizes.
Illustration with a single retiree receiving an equivalent pension at 40,000 euros per year. With the current reduction (10% of 40,000 therefore 4,000), its taxable income is 36,000 euros. With the reform and the reduction of 2,000 euros, this taxable income will rise to 38,000 euros.
In this situation, the share of his income located in the marginal tax tranche of 30% will be greater by 2,000 euros. This will result in an increase in its tax, of the order of 600 euros (2,000 x 30%).
40,000 euros for a retired couple
For couples, the situation is slightly different. A good thing for them is that this new reduction can be combined for the home: if two retirees compose it, then they will be entitled to two abatements of 2,000 euros. Or 4,000 euros.
Despite everything, the current reduction can rise to 4,399 euros. There too, there is therefore a threshold from which a retired couple will be penalized. It is 40,000 euros in income, for the two members of the household.
Sylvain Duchesne in his note for the PPI takes the example of a couple whose two members receive 25,000 euros in pension. Or 50,000 euros in total. With the current system, its reduction reaches the maximum, or 4,399 euros. Or a taxable income of 45,601 euros.
With the reform, the reduction is reduced to 4,000 euros (2 x 2,000), for a taxable income of 46,000 euros. This translates, according to capital calculations, by 106 euros in more income tax.
