Retirement: How much will you cost the end of the tax reduction of 10%?

The fiscal advantage which the retirees benefit, in the form of a 10% reduction on their imposed income, is more threatened than ever. Its abolition would make many losers, but would be anything but unjustified, according to tax lawyer Olivier Janoray.

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The option is on the table, the government no longer hides it. In its quest for savings, the executive could indeed recover no less than 5 billion euros thanks to a simple measure, but oh so unpopular: purely and simply remove the tax reduction of 10% reserved for retirees. A decision that would make many loserswith a loss that can climb up to 1,855 euros per year for the most taxed households, according to the Board of Mandatory Samples (CPO). “But in proportionality, it is the average pensions that will mainly be impacted”specifies Olivier Janoray, tax lawyer associated with Arsene.

Because who says deletion of the10% reduction in retirees – limited to 4,399 euros per tax household – known as an increase in the reference tax income (RFR) of the latter. An RFR which corresponds precisely to the amount subject to the income tax scale. Consequently, if this proposal is finally retained in the finance bill for 2026 examined in the fall in the Parliament, many taxpayers hitherto not taxable could become and see part of their income, that between 11,498 euros and 29,315 euros, taxed in the marginal tax tranche 11%. Illustration with a retiree affecting a monthly pension of 1,580 euros, or 18,960 euros per year, not taxable in 2025 thanks to the tax reduction of 10% and the discount mechanism. Next year, if the 10% deductible is deleted, it will have to pay some 304 euros in tax.

“With the implementation of the withholding tax, this tax niche no longer has to be”

Another retiree, receiving 35,000 euros in annual pension, currently regulates a note of 2,615 euros. In 2026, she could then climb to 3,665 euros, or 1,050 euros more! And the effects of the measure will not be confined to the sole amount of income tax, warns Olivier Janoray: “On pensions, CSG rates vary depending on the taxable amount. If the reference tax income increases, the CSG rate can also increase very well. ” Thus, by edge effect, a pension subject to the general social contribution to the median rate of 6.6% could switch to the normal rate, at 8.3%.

Very penalizing, therefore for some pensioners, the abolition of the 10% reduction would not remain illogical, according to the expert. Far from it, even: “I do not understand the relevance of this tax niche. When it was set up (in 1978, on the initiative of Maurice Papon, then deputy, editor’s note), the reflection was to avoid retirees to pay more tax the year following their retirement, while their income had dropped. With the implementation of Source with source income tax, it no longer has to be “he points out.

And for the tax lawyer, the government should not stop at retired only: “Do the 10% reduction for employees still make sense?” Should this tax advantage be more capped, at 5% for example? Same question for the tax reduction of journalists of 7,650 euros per year. ” So many tax justice measures, for Olivier Janoray, who at the same time proposes to play on the income tax scale. “Does the entry into the scale get too early?” In this case, let’s rework it to set an entry door in the identical tax for all taxpayers ”he pleads.