Pension Rights of Micro-Entrepreneurs 2017
Friday 06 October 2017
Micro-entrepreneurs need to realise a minimum turnover each year to obtain entitlement to a French pension, and thresholds have been revised for 2017.
If you run a business as a micro-entrepreneur you pay a single fixed percentage of your turnover in social security contributions. These contributions grant an entitlement to a pension, along with other benefits.
The actual percentage contribution varies by type of business, and the pension rights earned each year will depend on the turnover of the business. A minimum turnover is required to earn such rights, and the threshold figure differs by business activity.
For those in a sales based activity (including furnished accommodation and restaurants) the minimum turnover in 2017 to earn one quarter/year rights is €3,510; for those in a service activity it is €2,890; for the professions libérales affiliated to the RSI it is €2,218 and for professions libérales affiliated to CIPAV it is €2,218.
The following table shows the turnover needed to obtain one to four quarters' pension rights in 2017 for each business category.
The figures are net, after deduction of the standard cost allowance granted to a micro-entreprise, ie, 71%, 50% or 34%. Thus, in the case of a Cipav affiliated business, where a cost allowance of 34% applies, the threshold is based on 66% of turnover.
| Pension Thresholds 2017|
|Type of business||One Qtr||Two Qtrs||Three Qtrs||Four Qtrs|
Whilst the prospect of obtaining a French pension may be of interest to some, most expats should not hold their breath about the level of their pension entitlement. Without many years of contributions on a respectable income it will amount to little more than pin money.
And it might also mean you lose your entitlement to S1 health cover in retirement and pay more in taxes than you receive in pension income. We discussed this issue in our article S1 Health Cover and French Pensions.
The process of administration of the pension contributions, records and payments of micro-entrepreneurs is divided between three different agencies.
All micro-entrepreneurs pay their social security contributions to URSSAF, the social security contributions collections agency, but URSSAF do not administer the pension fund.
Most pensions are handled by the RSI (Régime Social des Indépendants) for BIC related businesses, although some BNC businesses have their own pension fund run by CIPAV (Caisse Interprofessionnelle des Professions Libérales).
And as we have reported previously in these pages, both agencies have been widely criticised for substantial maladministration, with errors and delays in the administration and payment of benefits.
As a result of these shortcomings the government are planning to merge the RSI with the main national insurance fund, the Caisse nationale d’assurance maladie des travailleurs salariés (CNAMTS).