Retirement and residence abroad: the French case
At the end of 2019, France faced the longest social conflict in its history due to pension reform.
This reform was put on hold with the onset of the health crisis. However, the government plans to adopt this reform before 2022.
When persons of French nationality have worked abroad or wish to settle abroad for retirement, it is important to take precautions.
Career abroad and retirement
The French posted worker, whether employed or self-employed, continues to contribute to the basic and supplementary French scheme.
In this case, the worker is always covered by the French social security system.
The period of work performed abroad will be validated for the purposes of the pension, as if the worker had remained employed in France.
On the other hand, the expatriate French worker no longer contributes to French compulsory schemes. Instead, the worker contributes to the local scheme if one exists.
However, it is always possible to make voluntary contributions in France, while still contributing to the local scheme.
The calculation of the pension will depend on where the worker has worked and whether or not there is an agreement with France.
French pensioners abroad
Before making the decision to retire abroad, it is advisable to be well informed about the rules applicable in the host country, the social agreements and the tax conventions that exist between the chosen destination and France.
Moving abroad at the time of retirement does not prevent a person from receiving the pensions due.
In order to receive the retirement pension, a life certificate must be sent annually to the competent pension fund to ensure that the retired person is still alive.
However, the solidarity allowance for the elderly (ASPA) is reserved for pensioners living in France.
Moreover, the taxation of retirement pensions varies according to whether or not the host country has concluded a tax treaty with France.
International tax treaties are signed to avoid double taxation for expatriates.
Under the rules laid down in the convention, a pensioner residing abroad is subject to:
The taxation of the country of residence, whatever the nature of his pensions (private pension, civil servant’s pension or pension from compulsory schemes).
French taxation, whatever the nature of his pensions.
Taxation in the country of exile for private pensions (life insurance and personal pension savings, among others) and taxation in France for civil service retirement.
In the absence of an agreement, the tax is levied at source in France and the pensioner is liable to double taxation.
Care provision in the new country of residence
In the case of a departure from France, health care costs are no longer covered by sickness insurance.
Outside of the European Union, private insurance will be required.
Since 1 July 2019, Article 52, II 4th b of the Finance Law has tightened the conditions under which certain French pensioners residing abroad can obtain reimbursement when they come to France for treatment.
This new provision provides that such persons may not be entitled to the payment of their health expenses during their temporary stay in France unless they have contributed for their retirement for at least 15 years in France, unless the country in which they live has concluded a social security agreement with France.
This 15-year clause, which already existed for workers of foreign nationality, now applies to all pensioners irrespective of their nationality.
This applies only to short stays (less than 3 months).
If the stay lasts for more than three months, French pensioners who have not contributed for at least 15 years can benefit from the medical aid scheme.
They may also make voluntary contributions to the Caisse des Français de l’Étranger (CFE) in addition to their local insurance.
If you have any questions, contact Emeline Eraud (email@example.com).