A minimum pension of 1200 euros. Here is what provides in particular the pension reform presented on Tuesday. But who will be entitled to this minimum pension? New withdrawals only? From the age of 64 or the age of the full rate? Six questions about this minimum pension… which will far from affect all withdrawals.
A lifetime of work should entitle you to a dignified retirement. During the press conference announcing the pension reform project on Tuesday, Prime Minister Elisabeth Borne promised that all employees affected by small pensions would benefit from a minimum pension equivalent 85% of net minimum wagethat is nearly 1200 euros per month from this year. A promise that raises many questions.
Will this minimum pension really be 1200 euros?
Elisabeth Borne said almost 1200 euros during her speech. And the press kit says: An employee at the SMIC throughout his career will have a pension of 85% of the net SMIC.
However, 85% of the current net minimum wage (1353 euros) gives a slightly higher amount 1150 euros. The cabinet of the Minister of Labor Olivier Dussopt subsequently explained that the objective of 1200 euros will be reached in the summer of 2023, thus providing for future revaluations of the minimum wage.
Taxes, RSA, retirement, salary… These increases that await you in early 2023 with inflation at 7%
For current or new withdrawals?
This was the main question before the Prime Minister’s announcements: the promise of a minimum pension of 1200 euros was initially intended to affect only new withdrawals. Measure of appeasement towards certain unions, and political gesture targeting the Republicans, current withdrawals will also be affectedas Elisabeth Borne said on Tuesday January 10, 2023 at a press conference, before specifying ds this year.
2million small pensions will be increased
We have decided to integrate into our project the revaluation of current pensions for all those who have a complete career at Smic level, said Elisabeth Borne, who added: 2 million small pensions will be increased. These former employees or self-employed and craftsmen will indeed have a pension equivalent to 85% of the Smic, confirmed the Prime Minister during the press conference.
But beware, for future and current withdrawals, this threshold of 1200 euros is far from certain for everyone…
A minimum for full careers: 62, 64 or 67?
Here is the concept to retain: to be entitled to this minimum pension of 1200 euros, it will be necessary to be able to justify a full career. Translation, in tricky and tricky retirement lingo: have reached the age of the full ratean age not to be confused with the legal age (currently 62, soon to be 64 if the reform passes).
Retirement: minimum pension, supplementary, legal age, full rate… 10 key words to understand the reform
| year of birth | Number of terms required |
|---|---|
| 1955 1957 | 166 quarters (41 years and 6 months) |
| 1958 1960 | 167 quarters (41 years and 9 months) |
| 1961 1963 | 168 quarters (42 years old) |
| 1964 1966 | 169 quarters (42 years and 3 months) |
| 1967 1969 | 170 quarters (42 years and 6 months) |
| 1970 1972 | 171 quarters (42 years and 9 months) |
| 1973 or later | 172 quarters (43 years) |
In concrete terms, if you were born in 1975, you will in any case have to work at age 43, or reach age 67, to be entitled to this minimum pension. In your case, if you started working around the age of 22, for example, reaching the legal age of 64 provided for by this reform will not be sufficient to qualify for the minimum pension.
1200euros minimum: gross or net? With or without complementary?
Important clarification: the minimum monthly pension of 1,200 euros mentioned by the government means basic + supplementary pension: this mechanism has yet to be detailed by the government but it will be based on the current minimum contribution (read below) and supplementary plans.
Furthermore, does this minimum amount of 1200 euros mean gross or net? Because the withdrawals contribute for the CSG and the CRDS in particular. Again, we have to wait for the details of the reform project. The office of the Minister of Labor confirms that it will be 1200euros gross minimum pensionan amount from which it will therefore be necessary to subtract the CSG in particular.
How many current withdrawals would be affected by such a minimum?
More than half of the total number of withdrawals, all the same. Regarding current withdrawals, for which fewer quarters were therefore necessary to reach the full rate, approximately 3 out of 5 withdrawals can justify a full career according to statistics from DREES, the equivalent of INSEE for social data.
But beware, small pensions are precisely those that have not necessarily reached the age of the full rate. Still according to the DREES, the proportion of retired women with a full career is much lower than that of men.
Currently, the contributory minimum which already ensures a minimum basic pension for the most modest concerns a third of withdrawals (nearly 5 million people) according to the Pension Insurance.
What is the minimum pension today?
There is already a minimum pension, the contributory minimum, but it only concerns the basic scheme, in other words pension insurance (or Cnav) for employees in the private sector. These same ex-employees of the private sector do not, however, benefit from a minimum for the complementary Agirc-Arrco.
Like the minimum pension promised by the government, the current contributory minimum is subject to a contribution period condition, with a subtlety between the quarters contributed (120 necessary for this contributory minimum) and the need to reach the age the full rate (different from the legal starting age) in order to be able to benefit fully from this contributory minimum. If you meet the conditions for a full career, without discount, this contributory minimum is 8,970.87 euros gross per year, or 747.57 euros gross per month, we read on service-public.fr.
To this contributory minimum of the basic pension is added the supplementary pension! However, there is in fact no minimum for complementary products. Given the heterogeneity of situations, it is difficult to quantify the current minimum pension in the event of a full career. MoneyVox questioned Agirc-Arrco on Tuesday on the current amount of the supplementary pension for a withdrawal at the full rate taking advantage of the contributory minimum. Agirc-Arrco having confirmed the complexity of such a simulation, MoneyVox will return to this subject in the coming days.
Retirement: a subtlety to receive the full automatic rate of your pension at age 67
Minimum pension: key figures on the current contributory minimum
- 4.8million withdrawals receive the minimum contribution from the general scheme according to the Cnav, i.e. 34.1% of all withdrawals covered by the general pension insurance scheme (Cnav).
- Currently, approximately 3 out of 5 withdrawals can justify a full career according to the DREES (2022 edition, withdrawals and retirements).
- For the withdrawals from the public servicefor whom the complementary weighs much more weakly than for the former employees of the private sector, the minimum guaranteed is currently 1248.33 euros per month, again on condition of being able to prove a full career (different age depending on the case).
Minimum pension ≠ minimum old age
Beware the confusion! Solidarity allowance for the elderly (ASPA), or minimum old age, is part of the social minima the image of the RSA. The ASPA is not affected by the pension reform. In 2023, this minimum old age increases to 961.08 euros per month for a single withdrawal (i.e. 44.3 euros more compared to January 2022) and 1,492.08 euros per month for couples (i.e. 68.77 euros more compared to last January). Important note: like the other social minima, these amounts correspond to the maximum aid, in addition to any other monthly resources you may have.