November 29, 2021

why some retirees who thought they were eligible will not receive it

The government has included retirees in its “inflation check” but only those subject to a reduced or median CSG rate. Explanation.

Retirees will therefore also be entitled to 100 euros of the inflation allowance. While the government initially thought of a “fuel allowance” that would have only affected assets, it eventually decided to expand it to the inactive and rename it “inflation allowance.”

However, they will have to wait a little longer than the others before receiving their 100 euros. If in the private sector it is in December that this aid will be paid and in January in the public, retirees will only receive it in February.

In total, “70% of retirees” will be affected by this aid, said government spokesman Gabriel Attal on Friday, which represents a little less than 12 million people.

If for employees, the limit for receiving the allowance has been set at a salary level of 2,000 euros net per month (the months of October and November are concerned), for retirees, the bar should be a little lower finally, to 1943 euros.

Why? Unlike the vast majority of employees, retirees receive their pensions from several different pension funds. This usually represents several amounts of less than 2,000 euros per retiree. The risk, we are assured on the side of Bercy, is that a retiree receives several allowances of 100 euros and this while the sum of his pensions could far exceed 2,000 euros.

To solve this problem, the executive relied on the file of the General Directorate of Public Finance of retirees who pay the CSG at a median rate (6.60%) or at a reduced rate (3.80 %). However, the median rate applies to retirees whose benchmark tax income does not exceed 23,147 euros per year for a single person, i.e. around 1,943 euros per month according to Bercy. Beyond that, retirees are subject to the standard CSG rate, ie 8.30%. The latter should not benefit from the inflation allowance of 100 euros.

But the problem arises for retired households. Because the CSG is calculated on the income of the tax household unlike the compensation which will be personal. Some tax households are subject to the full rate CSG while on average each individual who composes it can earn much less than 2000 euros per month.

Thus a retired couple who earn 35,506 euros per year will be subject to the normal CSG rate and will not be entitled to the inflation premium. However, this amount of household income represents 1,479 euros per month per person. We are then well below the 2000 euros per month announced.

Aware of the problem, Bercy ensures to seek a solution in order to solve the problem by the end of the year.