Taxes, pensions and medical

[thebigfatgeek]

Hi, I hope I am asking the right question in the right forum. Please correct me if I did not. My wife and I are in the process of moving to France. I have UK citizenship, and will be working in France for the foreseeable future.

I have three questions about tax, pension and medical benefits

How does the French pension system work, and how does one accumulate your pension. Is it similar to National Insurance, does it depend on the number of years of contribution or are there further criteria that is used? I heave heard that it is based on "points", if so, could somebody please explain how the point system works?

In terms of medical & health services, would my family be able to qualify immediately for medical benefits? Are their any limitations placed on new arrivals?

In terms of taxation, I have 2 unmarried children under 20, but they will not be moving with us to France, would I be able to claim them as dependants under the French tax system?

Your help would be much appreciated


Best Regards

Pieter

[Bevdeforges]

Hi and welcome to the forum.

I've set this up as a new thread, the better to attract responses. But let me take a stab at your questions to start with:

The French pension system.
Basically, if you're working in France you'll be paying into it and earning "points." It's a two-phase system. There's a basic pension that is based on how long you work. And there's a second pension that is related to how much you made while you were working in France. It's for this second pension that the point system kicks in.

At present, you need 40 years (soon to be 41 or 42) to be entitled to a "full" pension. But if you put off retirement until age 65, you can get the "full" basic pension amount regardless of the years you put in. At about age 57 or 58 they are supposed to contact you to do an estimate of your pension eligibility and level. They do count time worked in other countries, particularly other EU countries, but they don't seem to count your salary level for those years.

Medical and health services
If you're working and paying into the cotisation system, you and your family are covered. The French system is a reimbursement system - again in two parts. The state health care system reimburses about 70% of most routine health care, and then most people have a mutuelle that pays the rest according to the terms of the specific contract you have. Your employer usually provides the mutuelle - with the cost split 60-40 between employer and employee - but if your employer doesn't have a mutuelle, you can always get your own.

Sécu (the government system) is based on a % of your salary, while the mutuelle is a set fee per person covered (usually about half price for children under 18).

Normally you pay the doctor (there is a set fee schedule from the government) and then you are reimbursed directly into your bank account - the sécu forwards all necessary information to your mutuelle. Quite a nice system, actually.

Taxation
Your unmarried children under age 20, are they under age 18? The tax system is a little bit different in France. For children under age 18, you get an additional one-half "part" for each child, which is then used in determining your final tax figure. (Very simplified, you add up all your taxable income, then divide by the number of parts you're entitled to. Find the tax on that portion and multiply that by the number of parts to get your final tax. It avoids having to fiddle with different tax rates for married, vs. single, vs. with or without children.)

After age 18, you have the option to "attach" the children to your household rather than to take their parts if they otherwise qualify. (For example, you can "attach" your children up to age 25 if they are full time students.) It gets complicated here, because you then have to decide whether you want to take their "part" or take a deduction for whatever "pension" you are paying them to live elsewhere. You can't do both. I think at this point I'll leave this to someone with a bit more experience in these matters. (I don't have children, so haven't really had to worry about this.)
Cheers,
Bev

[thebigfatgeek]

Thanks for the kind response. I am concerned about the pension structure in France, and the rules of withdrawal. Should I leave France after a few years (i.e. before retiring) would you be able to withdraw your social benefits, or will it remain dormant until you reach pensionable age? Would I be able to draw it if I live at that point in another country? Do you have a choice between paying into the social insurance scheme or a private scheme (which I have already in the UK)

Thanks for any help

[Bevdeforges]

Originally Posted by thebigfatgeek

Thanks for the kind response. I am concerned about the pension structure in France, and the rules of withdrawal. Should I leave France after a few years (i.e. before retiring) would you be able to withdraw your social benefits, or will it remain dormant until you reach pensionable age? Would I be able to draw it if I live at that point in another country? Do you have a choice between paying into the social insurance scheme or a private scheme (which I have already in the UK)

Thanks for any help

There is supposed to be a system of reciprocity amongst the EU countries. This means that, as long as you retire in one of the EU countries, they are supposed to give you credit for the years you worked elsewhere, though they may or may not credit you for your income level. You draw your pension from the country you are living in when you actually retire.

You don't have any option in France about the retirement contributions. You pay into the French system while you're working in France - however you can, if you like, set up a private pension fund to add to your eventual retirement benefit. I'm not sure if the rules for these funds would allow you to transfer your French fund into your UK fund when you leave the country - though I suspect someone at the insurance company or bank that administers the pension fund might know.
Cheers,
Bev