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ORIGINAL FRENCH ARTICLE: Peu de changement pour les ménages modestes

by Kevin Boucaud

Little Change for Low-Income Households

Translated Wednesday 7 January 2015, by Gene Zbikowski

January 1 is also the time when government-guaranteed minimums are revised. This year, as in the preceding years, the announced increases are quite minimal.

As regards government-guaranteed minimums, several changes are expected in 2015 but no revolution or major change is in sight.

Beneficiaries of the active solidarity income (RSA) – which is limited to people who do not work at all – and workers earning the minimum wage will obtain very meager increases in view of the increases in costs which they will have to bear.

As regards taxes, the main change concerns income tax, with the elimination of the first tax bracket which Prime Minister Manuel Valls announced a few months ago.

The monthly amount of RSA will increase by 0.9%, that is to say an additional 4.53 euros for a person living alone, who will henceforth receive 513.88 euros a month. It goes without saying that this increase will not change the lives of RSA beneficiaries.

As regards the minimum wage, not much was to be expected there either, since in November Minister for Labor François Rebsamen had ruled out any “additional boost,” stating that “This isn’t the right solution.” In the final analysis, only the usual mechanisms came into play: the minimum is increased each January 1 by one-half the increase in the purchasing power of the hourly base salary of a worker (SHBO). As a result, this year the gross minimum wage will rise to 9.61 euros an hour (as against 9.43 euros an hour in 2014), that is to say 1,345.40 euros a month for a 35-hour work week.

It is however the income tax reform which will affect the greatest number of people. The elimination of the first tax bracket should benefit 6.1 million low- and medium-income taxpayers. To this measure one must add the reinforcement of the reduction granted exceptionally to 3 million households in September.

All in all, 9.1 million taxpayers will see their income tax fall, and households will only be taxed above 10,000 euros per person-share, as against 6,000 euros in 2013.

Finally, the 460,000 retirees who must pay the supplementary social security contribution (CSG) will see their rate increased from 3.8% to the full 6.6% rate, while simultaneously 700,000 tax-payers will see their CSG rate fall.

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