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can I reduce my CIPAV costs

Hi
I've just had two letters from CIPAV in the last week.

The first saying that they want 2800 of me this year, the first 1500 due mid-april (pension)

The 2nd letter saying that at present, with my 4-points, my pension will be .... 24euro a year.

As I'm not going to be able to work into my 90's, is there any way I can get this amount to pay reduced? or, by investing 3k a year into the pension will I eventually get something back when I retire..... if I live that long.

It seems a huge imbalance at the moment. It always seems a huge amount when you get a demand for that amount in one go.

Is there something I can do about this? I didn't earn near the maximum for the BNC last year.


I'm not a geek, I am a technically aware early adopter
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Re: can I reduce my CIPAV costs

 crazyfrog wrote:
Hi I've just had two letters from CIPAV in the last week. The first saying that they want 2800 of me this year, the first 1500 due mid-april (pension) The 2nd letter saying that at present, with my 4-points, my pension will be .... 24euro a year.

Someone's having a laugh, surely? 


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Re: can I reduce my CIPAV costs

Unfortunately that's how the system works. While you are working, you are paying for those who are currently drawing their pension, rather than building up a pot for yourself. So what you may eventually get out of it depends entirely on the points you build up; if you only pay in for a short time you get few points meaning a laughably inadequate amount back. It does make up for those who pay in for all their working lives and will, at least in theory, get a decent return. People think that the UK pension system is unsustainable and in dire straits - they tend to forget that others, including the French, are in a very similar position.

The only way you can get more out is by purchasing more points - quite the opposite to what you probably want to do, as at this stage it would probably mean 50€ per annum extra for a substantial extra investment. As our accountant pointed out when I was paying several thousands into CIPAV over several years for a 30€ annual return, the contribution is only negotiable upwards, not downwards. And neither do you have the option of paying into your own fund.


Will

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Re: can I reduce my CIPAV costs

From memory there is a portion that is obiligatory and a portion that can be reduced non obligatory (up to 75%) based on your earnings, this info used to be on the back of the letter telling you how much ou had to pay. You had to return it to apply for the reduction. This used to halve my bill and as I was fairly sure that I was not going to be forever in France and therefore unlikely to pay in enough I chose this option.
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Re: can I reduce my CIPAV costs

I believe it should be possible for you to convert to the micro social (autoentrepreneur as near as dammit) regime at the end of the year. This is new because CIPAV originally wouldn't countenance it. I don't know whether this would help your particular situation.

By the way, without knowing your age it's hard to comment on your pension prospects. Did I miss something?

Edit: just found the reference.

Have a look here:

http://service.cipav-retraite.fr/cipav/article-10-micro-social-devenir-auto-entrepreneur-98.htm

The significant bits are:

Le statut d’auto-entrepreneur n’était ouvert au 1er Janvier 2009 qu’aux seuls créateurs d’entreprise. La Loi de financement de la sécurité sociale pour 2010 ouvre la possibilité à tous les professionnels libéraux affiliés au 31 Décembre 2009 à la CIPAV d’opter pour le régime Micro-social simplifié (ou régime auto-entrepreneur), quelle que soit la date de création de l’entreprise.

Si vous optez pour ce nouveau régime, vos cotisations seront calculées sur 100% de votre chiffre d’affaires, auxquels sera appliqué un taux de prélèvement global de cotisations de 18,3%.

Si vous souhaitez être inscrit dès 2010 comme auto-entrepreneur, la loi vous permet d’exercer votre droit d’option, à titre exceptionnel, jusqu’au 28 février 2010. À cet effet, un formulaire spécifique pour les personnes déjà affiliées à la CIPAV sera prochainement mis en ligne sur le portail de l’auto-entrepreneur.

Vous n’avez aucune démarche à effectuer auprès de la CIPAV et vous ne devez pas vous radier. Si vous avez l’intention de choisir le régime social simplifié pour l’année 2010, vous ne devez pas tenir compte du pré-appel des cotisations de l’année 2010 que vous avez reçu. Toutefois, vous resterez redevable en 2010 de la régularisation des cotisations de l’année 2008.

 


Albert the InfoGipsy

"So welcome to the Citadel where the question is 'Am I?'"
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Re: can I reduce my CIPAV costs

Hi Crazyfrog,
I was in a similar boat. I paid CIPAV around 1400 euros when I first came to France part way through 2008... My delcared net profit for that year was less than 7000 euros, yet based on that, this year they were asking for more than 4200 euros, which came as quite a shock. I went to their Paris headquarters today, and explained my situation. They took my micro-BIC commercial activity into consideration, reduced it by 71%, and will then tax 8,6% of that, so I should have it reduced from some obscene total to just over 500 euros.
I'm not sure what your circumstances are (certainly different rates for BNC - I think they reduce the turnover by 34%), but you really need to go and see them in person. I found them very friendly and helpful in person, although by phone it was very difficult indeed to speak to anyone, and when I did, they were miserable and very unhelpful.
Bonne chance.

 crazyfrog wrote:
Hi I've just had two letters from CIPAV in the last week. The first saying that they want 2800 of me this year, the first 1500 due mid-april (pension) The 2nd letter saying that at present, with my 4-points, my pension will be .... 24euro a year. As I'm not going to be able to work into my 90's, is there any way I can get this amount to pay reduced? or, by investing 3k a year into the pension will I eventually get something back when I retire..... if I live that long. It seems a huge imbalance at the moment. It always seems a huge amount when you get a demand for that amount in one go. Is there something I can do about this? I didn't earn near the maximum for the BNC last year.

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Re: can I reduce my CIPAV costs

Zara, what they've done is effectively what should happen anyway.  When you declare your income (on your DCR) the amount for the calculation of cotisations is reduced by one of the amounts you mentioned (34, 71 and I thnk perhaps there are others).  The calculation should only ever be on the reduced amount and yes is around 8% for tranche 1Cipav.  Hopefully this year it will be more straight forward for you although it usually takes a couple of years for things to sort themselves out.

Would be interesting to know crazy frog what percentage of your income the 2800 is.  I just dug out my old recoirds and can see that I had a similar total figure made up of 1495.00 which was 8.6% for what they refer to as Tranche 1 assurance veillesse and then a second charge of 924.00 euros for  retraite complimentaire.  The form then allowed me to send back to them if I wished to apply for a reduction of the complimentaire part based on my income.  I did this by stating my net income (after the reduction of 34% in my case), they then reduced the 924.00 to 231.00 which is a bit better and this is what I paid in the second payment in October so total was 1772.00.


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Re: can I reduce my CIPAV costs

I had a demand from CIPAV for something like 14,000€ for one year, which was about half of my turnover before deductions. It took the accountant quite a long time before it was reduced to about 3000€. It seems that if they don't have any details (even if it's their own fault that they don't have them - i.e. they have lost the paperwork) they make up a figure; in my case they put me into the top earnings bracket (Big Smile [:D]).

A pity they don't apply the same over-estimation when it comes to what you get back. I am entitled to all of about 30€ per annum.


Will

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