The 0.3% increase in basic pensions on 1 January 2019 instead of 1.6% if the rules had not been amended reduces by more than 75% the gain expected by the cancellation of the CSG Retraite 2019 concerned.
Among the government’s responses to the yellow vests movement is indeed the cancellation of the CSG increase of 1.7% for pensioners whose incomes are below about 2000 euros (for a single person under 65), or a reference tax income of € 22,580 per year according to the 2019 scale.
The executive thus extends the share of pensioners saved by this increase from 40% to 70%, since the exemption threshold has so far corresponded to around € 1,300. monthly income (€ 14,548 in reference tax income for a person under 65). These retirees between 1300 and 2000 euros of monthly income are therefore reapplied their initial CSG rate, or 6.6%, instead of 8.3% before the cancellation as CSG Retraite 2019.
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What is the CSG?
The CSG is a tax directly levied on business income, retirement pensions, unemployment benefits, wealth and investment income, etc. Created by the finance law for 1991, the CSG contributes significantly to the financing of social protection (unemployment insurance, sickness, etc.). It has been proposed several times to make the CSG progressive.
The civil servants, for their part, will not see their remuneration fall as a result of the reform. But they will not see it increase either. The government introduced a 1.67 per cent offsetting allowance to offset the increase in CSG. The exceptional solidarity contribution (CES) of 1% disappears for the officials concerned. But in this case, the compensatory allowance is reduced to 0.67% of the gross salary.
Increase in CSG on land revenue
Other losers of the reform: landlords. Property income (rents and real estate gains) that they collect are not subject to the new single flat-rate levy of 30% and retain the same system of taxation on the progressive scale of taxes and social security contributions. Since the increase in CSG increases their rate from 15.5% to 17.2%, property income will also be impacted by the measure.