Pension tax cap reduction proposed

France's government is proposing to lower the maximum benefit of a 10% tax deduction on pensions, currently capped at 4,439 euros, to 3,000 euros as part of the 2027 finance bill under review by Parliament. The move aims to generate 1.2 billion euros in savings by reducing this advantage for retirees.

Tax cap applies to entire household

The current 10% deduction applies to the total of "Pensions, retirements, and annuities" declared by a tax household, whether it consists of a couple or a single person. The proposed change would maintain this structure, meaning the cap would apply to the entire household, not divided between individuals.

Retirees in couples benefit fully

If the measure is adopted, a retired spouse in a couple where one is employed would still receive the full 10% deduction on their pension, without the cap being split between the two partners. The same rule would apply to couples where both are retired, with the cap not being divided or added.

Impact on pensioners with high income

A couple where each receives a pension of 2,999 euros per month would not benefit from the 10% deduction, as the combined total would exceed the proposed cap. Active workers, however, receive a separate 10% deduction on their income, with a current limit of 14,555 euros, expected to rise slightly in 2027 due to inflation.