The reform of the tax allowance for retirees should indeed take place. Announced by François Bayrou on July 15, during the presentation of his savings plan of 44 billion eurosthis measure appears in the finance bill (PLF) for 2026 presented by his successor Sébastien Lecornu in the Council of Ministers this Tuesday, October 14, and that Capital was able to consult. In terms of resources, article 6 provides for the “creation of a flat-rate reduction in favor of retired people”instead of the current 10% reduction enjoyed by retirees.
If the 2026 Budget is adopted as is, this reduction would no longer be equivalent to 10% of declared pensions – with a floor of 450 euros per member of the tax household in 2025 and a ceiling of 4,399 euros for the entire household. It would be replaced by a package of 2,000 euros “applicable to retirement pensions received by each member of the tax household”specifies the statement of reasons for the measure.
Several hundred euros more tax for certain retirees
For the government, this is “better target the measures applicable to retired people to the most modest”. Mechanisms which represent a significant cost for the country’s degraded public finances and which benefit “mainly to taxable households”justifies the government. Thus, by reforming the reduction on pensions, some retirees will be winners. This will be the case for single people who receive less than 20,000 euros in annual pension, or retired couples whose total pensions do not exceed 40,000 euros.
The gain for the pensioners concerned – approximately 100,000 according to a study by the Public Policy Institute (IPP) – would be limited to a few euros per year, while François Bayrou promised “hundreds of euros for low-income retirees at the bottom of the scale” this summer. On the other hand, the losers of the measure (1.4 million according to the IPP) would have to pay a high additional tax: a single retiree declaring 44,000 euros in pension will in fact see their tax bill increase by more than 700 euros.
The specific reduction for small and medium pensions removed
And to make matters worse for their finances, some retirees could suffer another tax blow, with the removal of the specific deduction currently benefiting taxpayers over 65 and disabled pensioners. If the latter would retain this deduction – of 2,796 euros in 2025 for pensions below 17,510 euros and of 1,398 euros for those between 17,510 and 28,170 euros – retirees aged over 65 would lose it.
According to the executive, this specific reduction “affects the progressivity of the income tax scale while being poorly targeted and poorly adapted to the extent that, without even the reduction, the most disadvantaged retirees are not taxable”. Result: if the government passes the test of censorship and the 2026 Budget passes that of Parliament, the overwhelming majority of retirees will see their income tax increase next year.
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