Micro-Entrepreneur Spouse Social Security Contributions
Friday 04 September 2020
The social security contributions due by a 'conjoint' in a micro-entreprise are not being applied by URSSAF.
We know from your mails that many of you who have decided to set up a business in France run it as a micro-entreprise.
It is a simple sole-trader status, easy to understand and run, and particularly suitable for those whose business is small and whose investment and cost structure is low.
It is also possible for the spouse to be a partner in the business, called a conjoint-collaborateur.
Indeed, the law requires that where the spouse has a regular role in the business they are required to be registered in it.
This may obviously be the case, for instance, in running a chambre d’hote or letting of gite accommodation, but it may also be as an administrator or bookkeeper.
Inevitably, with that status comes an obligation to pay social insurance contributions, which are around half of those payable by the main business owner.
However, as several of you have pointed out to us, in practice these contributions are not paid, due it seems to an on-line systems deficiency in the social security contributions collection agency, URSSAF.
All social security contributions payable by micro-entrepreneurs must be made on-line through the URSSAF portal, but the only rates on the portal are those for which the main business owner is liable, not those of their business partner.
In correspondence we have seen between business owners and URSSAF, the agency themselves admit that they are unable to configure the system so that spouse payments can be made, stating in one case:
'Actuellement nous sommes dans l’impossibilité d’appeler les cotisations de conjoints collaborateurs des indépendants exerçant sous le statut de la micro-entreprise.'
As a result, the agency ‘invited’ one conjoint-collaborateur to set up their own micro-entreprise, or for the couple to establish a limited company.
It is an extraordinary admission by URSSAF, as conjoint-collorateur status is enshrined in statute law, as are the social insurance contributions payable.
That is perhaps why the agency only extended an ‘invitation’ to for the spouse to separately register, as they have no legal right to insist the couple each have their own business.
Were the spouse to set up her own business (within a business!) they would pay a higher amount of the social security contributions as the rate would no longer be discounted.
Moreover, it would be improper to do so, as there would have to be an artificial splitting of the sales between the two partners in a single business entity, which would require that the customer received two invoices for a single service or product.
Needless to say, there is a downside to all of this, which is that as the spouse does not pay social security contributions, they obtain no right to social insurance cover.
One of the important benefits of being a business partner is that it grants an automatic right to access the French health system, which is not automatically the case for early retirees from the EEA.
Nevertheless, all dependants of a business owner have, in any event, an automatic right to health care, albeit adult dependants are required to make separate application, and the process can be lengthy and tiresome.
It is unclear just how long URSSAF have been unable to collect spouse contributions, but it appears from what some of you have stated that it may always have been so. Whether that remains the case, and whether URSSAF would later have any right to claim for unpaid contributions, remains to be seen. It does, however, seem likely that, if the spouse has not been awarded pension or health rights as a business partner, then any retrospective call for contributions would be illegal.
However, at some point, it seems inevitable that URSSAF will undertake development of their online system to permit spouse contributions to be made.
You can read about setting up a small business in our Guide to Micro-Entrepreneur Business in France.