Government plans to cap retirees' tax deduction at €3,000 and adjust pension indexing
The executive is set to lower the maximum tax relief for retirees from €4,439 to €3,000 and is considering partial pension de-indexation.
According to an insider, the upcoming budget will cut the tax deduction cap for retirees to €3,000, replacing the existing €4,439 ceiling that allows a 10% deduction of annual income. To offset the shortfall, the administration is also exploring a partial de-indexation of basic pensions, meaning some retirees would see their payments rise slower than inflation or be frozen altogether, depending on income brackets set by decree.
The plan builds on a Senate-approved measure from autumn 2025 that was previously set aside. Prime Minister Sébastien Lecornu has indicated that the contribution expected from retirees will be lower than earlier estimates and that the smallest pensions will be safeguarded. The budget proposals will be presented to the cabinet on 1 October before parliamentary debate.
Why it matters
The changes could affect the disposable income of millions of retirees and alter France's fiscal balance.
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