VI. Old age - France's social security scheme for self-employed workers
As from 1973, craftspeople and shopkeepers have a retirement pension scheme that is aligned with the salaried workers' general scheme. It is managed on a pay-as-you-go basis and based on national solidarity.
It guarantees pensions that are equal to those of non-managerial, private-sector salaried workers who have the same length and level of contributions.
To learn more about pension entitlements for craftspeople, manufacturers, and shopkeepers, please refer to RSI's website.
A. Statutory retirement age – Age of full-rate pension entitlement
As from July 1st, 2011, statutory retirement age has been gradually raised based on year of birth. It is 62 for members born in 1955 and later and ranges from 60 to 62 for those born before 1955.
You can be awarded a full-rate retirement pension regardless of your length of insurance if you retire later. The age of full-rate entitlement is 67 for members born in 1955.
B. Early retirement
Self-employed workers can retire prior to statutory age if they meet one of the following two requirements:
- if they have had a long career (beginning before the age of 20),
- or if they have disabled worker status.
1. Early retirement due to a long career
If you retire early due to a long career, you will be able to claim your basic pension at the full rate.
Requirements for an early retirement before age 60
All members who began working before age 16 are eligible for early retirement if they meet the following requirements. They must:
- have accrued 5 quarters under all schemes combined before the end of the calendar year of their 16th birthday, or 4 quarters for those born during the 4th quarter of the year;
- have a length of contributions under all schemes combined which, depending on their birth year, entitles them to a full-rate pension, plus, in most cases, 4 or 8 quarters of contributions depending on the age at which they retire.
Requirements for an early retirement at age 60 and beyond
Members who began working before age 20 are eligible for early retirement if they meet the following requirements. They must:
- have accrued 5 quarters under all schemes combined before the end of the calendar year of their 20th birthday, or 4 quarters for those born during the 4th quarter of the year;
- have a length of contributions under all schemes combined which, depending on their birth year, entitles them to a full-rate pension. This comes to 41 years and 2 quarters (166 quarters) for members born in 1956.
- Eligibility for early retirement due to a long career is based only on the member's length of contributions:
- The member's length of contributions must be equal to the length of insurance which, depending on their birth year, entitles them to a full-rate pension. It may be increased depending on the member's birth year and age at retirement.
- It is calculated based on a maximum of 4 quarters per year and takes account of the periods for which contributions were paid: quarters for which the member paid contributions plus any "equivalent quarters" (military service or periods on unemployment benefits, a disability pension, daily medical leave, maternity, or industrial accident benefits, etc.).
2. Early retirement due to disability
Members with "disabled worker" status can retire early starting at age 55 if they meet the following requirements. To be eligible, they must:
- Have worked, throughout all periods of insurance and contributions (see table below) with a permanent disability at a severity rating of at least 50% or, for periods prior to December 31st, 2015, they will need to produce a disabled worker's certificate ("Reconnaissance de la qualité de travailleur handicapé"/ RQTH).
- Have accrued a given length of insurance and contributions (for pensions with an effective date in 2016).
Length of insurance
- This is determined based on birth year and age at retirement.
- It takes account of all periods accrued through contributions, under all schemes combined, up to a maximum of 4 quarters per year.
- It includes certain periods for which there was no actual payment of contributions (military service, periods of war or medical leave, periods of hospitalization of 60 days or more, periods on disability or unemployment benefits, child-related insurance length increases, or employment as a family helper or abroad, under certain conditions).
Length of contributions
- This varies by birth year and by age at retirement.
- It is calculated with all schemes combined and takes account of a maximum of 4 quarters per year.
- It takes account of periods of insurance for which the member paid compulsory or voluntary contributions, those that were purchased (not including "Fillon purchases"), or those for which outstanding contributions were paid at a later date.
C. Insurance length increases
Additional quarters can be credited to a member's pension account through three different types of increase:
- The maternity-related increase: the mother is automatically credited with 4 additional quarters per child, provided that she is a member of the French social security system.
- The child-rearing increase* ("majoration au titre de l'éducation des enfants") and the adoption increase* ("majoration au titre de l'adoption").
* These two increases can be awarded either to the mother alone, to the father alone, or to both parents. The rules for how they are divided depend on whether the child was born/ adopted before or after January 1st, 2010. To learn more, please refer to RSI's website.
D. Pension rate increases
Any quarter of employment accrued after statutory retirement age and on which contributions were paid will increase the amount of your pension, provided that you have enough quarters for a full-rate pension.
This rate increase applies to periods of contributions accrued on or after January 1st, 2004.
For periods accrued from January 1st, 2004 to December 31st, 2008, the increase comes to:
- 0.75% from the 1st to the 4th additional quarter
- 1% beyond the 4th additional quarter
- 1.25% per additional quarter accrued after your 65th birthday.
For periods accrued from January 1st, 2009, the rate increase amounts to 1.25% per quarter, or 5% per year, regardless of the member's age or the number of quarters previously accrued. This new measure applies to pensions with an effective date on or after April 1st, 2009.
E. How retirement pensions are calculated
Entitlements arising from periods accrued prior to 1973 are calculated differently from those accrued after that date.
- Prior to 1973, craftspeople and shopkeepers belonged to a points-based retirement pension scheme. Their pensions were calculated based on the number of points accrued and on the value of the point (this value increased each year).
- As from 1973, their basic pension scheme is aligned with the salaried workers' scheme and is based on a pay-as-you go system pursuant to the principle of national solidarity. They also have a compulsory supplementary pension scheme.
How the basic retirement pension is calculated
Average annual income1 X rate2 X length of insurance (number of quarters accrued since 1973)3 / Reference length4 (maximum length of insurance)
1 - Your average annual income is the average of your income from your best earning years, with an upper limit of the social security ceiling (39,228 € in 2017).
The number of years taken into account ranges from 10 to 25 depending on your year of birth (25 for members born in or after 1953).
2 - Rate:
The maximum rate of 50% (full rate) applies to members who:
- Have reached the age of full-rate pension entitlement (67 for those born in or after 1955), or
- Have accrued a given number of quarters of insurance (under all schemes combined) which varies based on birth year, or
- if special circumstances apply (unfitness for work, disability, war veteran, deportee, or prisoner of war).
- Periods that count toward the rate are as follows:
- Periods of compulsory or voluntary contributions to an old-age insurance scheme
- Equivalent periods: military service, war, hospitalization for more than 2 months, disability, unemployment
- Insurance length increase: for children or arduous work
- Periods recognized as equivalent (periods during which a family member contributed to the family craftmaking or retail business without belonging to a compulsory old-age insurance scheme or employment abroad prior to April 1st, 1983).
If the insured does not have enough quarters or enough of a certain type of quarters but decides to retire sometime between statutory retirement age and the age of full-rate entitlement, a rate reduction applies. Indeed, his/her pension will be reduced by:
- 1.50% per missing quarter (members born in 1951),
- 1.375% (members born in 1952),
- 1.25% (members born in or after 1953).
The rate reduction will apply to a maximum of 20 quarters.
3 - Your length of insurance (number of quarters accrued since 1973 under the craftspeoples' or shopkeepers' scheme) includes quarters of contributions, equivalent quarters (periods in the military or on medical leave, maternity, disability, or unemployment benefits), plus the child-related insurance length increase.
Pensions and quarters accrued as a craftsperson and shopkeeper are calculated separately.
4 - Reference length is the length of insurance required for a full-rate pension. It varies by birth year.
of quarters for
a full-rate pension
Number of best
22 best years
23 best years
24 best years
25 best years
25 best years
25 best years
25 best years
25 best years
25 best years
25 best years
From 1973 on
25 best years
Several supplements can be added on to a member's main retirement pension.
- The 10% child-related increase: If the pensioner has had or raised 3 children for 9 years prior to their 16th birthday.
- The caregiving increase ("majoration pour tierce personne"): This increase is awarded to pensioners who have been officially assessed as unfit for work and whose health (before the age of full-rate pension entitlement) requires ongoing assistance from a caregiver to perform the ordinary activities of daily living. If the pensioner is drawing several basic pensions, only one of the schemes will pay this increase.
- The minimum pension ("minimum contributif"): For people who have paid contributions on a low income and have been awarded a full-rate pension. The "aligned" pension from the basic scheme (for employment since 1973) can reach a minimum amount known as the "minimum contributif".
- The minimum old-age pension ("Minimum vieillesse" ; Elderly solidarity allowance "Allocation de solidarité aux personnes âgées"/ ASPA): When a member reaches the age of full-rate entitlement (or statutory retirement age if unfit for work), s/he can receive a minimum old-age pension ("minimum vieillesse") regardless of the length of his/her career or the amount of his/her pension. This is awarded on the basis of a means test and on residency in France. When the member dies, the amounts paid under the ASPA program can be collected from his/her estate if the net worth of the estate exceeds 39,000 €.
G. The supplementary pension scheme
Supplementary pensions are calculated in points. The number of points accrued depends on the contributions that have been paid. The value of the point varies based on the date on which it was accrued.
When you claim your pension, the number of points accrued is multiplied by the value of the point.
As from January 1st, 2013, craftspeople and shopkeepers have a separate shared supplementary pension scheme.
The supplementary retirement pension is paid in full if the pensioner has been awarded a basic pension at the full rate. It is reduced if the basic pension was awarded at a reduced rate.
Retirement pensions are liable to compulsory social security deductions, depending on the pensioner's reference tax income ("revenu fiscal de référence") and number of shares.
They will be either completely exempt, or liable to the following rates:
CSG (generalized social contributions): 3.8% or 6.6% based on tax bracket
CRDS (social security debt reimbursement contribution): 0.5%
CASA (additional solidarity and autonomy contribution): 0.3%
Pensioners whose tax residence is not in France are not subject to CSG-CRDS contributions but pay a specific health insurance contribution (7.10%).
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