“Everyone will have to participate in the effort” recovery of public finances, had warned the Prime Minister, François Bayrou, on July 15, 2025. Everyone, and some more than others … The retirees in mind. Because the latter will not only be affected by the “White Year” and the freezing of social benefits – whose retirement pensions -, but they should also see the tax reduction granted to them on their income tax. More specifically, this 10% tax franchise would be replaced by a lump sum reduction of 2,000 euros per retiree. A change of magnitude, since pensioners currently benefit from a 10% more advantageous reduction: for example, on the revenues of 2024 declared in spring 2025, if it only reaches 450 euros at least per member of the tax household, it can peak at 4,399 euros for the entire household.
A retiree alone winning if he receives less than 20,000 euros
But who will lose, precisely, with this reform of the tax abatement of retirees which would apply on the income received in 2025? In a note published on July 29, the Institute of Public Policy (PPI) provides the answer to this question. His observation: whatever the reduction applied (10% or 2,000 euros), a home whose amount of pensions is equal to 20,000 euros will pay the same amount of income tax.
Logically, a single retiree which affects a pension below this threshold will see its tax decrease. All the opposite of a retiree receiving a higher service, for example 40,000 euros: while its net taxable income subject to the income tax scale was limited to 36,000 euros because reduced by 4,000 euros (10% x 40,000), this amount will amount to 38,000 euros (40,000 – 2,000) with the new system. In this situation, with income imposed in the marginal tax tranche (TMI) 30%, this retiree will have to pay 600 euros (2,000 x 30%) of more tax.
Couples of retirees advantaged up to 40,000 euros in income
Another scenario, with a retired couple who each receive 20,000 euros in pension, a total of 40,000 euros. With a reduction of 10%, their net taxable income currently reaches 36,000 euros (18,000 + 18,000), an amount identical to that obtained with a tax deductible of 2,000 euros per retiree (20,000 x 2 – 2,000 x 2). With the new mechanism wanted by the government, the tax of this couple would therefore be the same.
On the other hand, under this income threshold common to 40,000 euros, a couple would be a winner with theDefection of 2,000 euros per retiree. Unlike a retired couple, each member of which earns 25,000 euros, or 50,000 euros in total. With the current system, he can claim the maximum reduction of 4,399 euros, against 4,000 euros (2 x 2,000) with the reformed mechanism which would lead him to pay 106 euros in more tax.
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