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Social Security Budget Teeters After PS Tax Win and Surprise Vote to Scrap Key Levy

Lawmakers must pass the revenue section for the Assembly to debate spending measures, including the proposed suspension of the 2023 pension reform.

Overview

  • The Assembly approved a PS-sponsored rise in a slice of the CSG on capital income from 9.2% to 10.6% by 168–140, expected to raise roughly €2.6–€2.8 billion in 2026, with the government offering a cautious green light to keep the debate alive in the legislative shuttle.
  • Deputies rejected the government’s surtax on health mutuals and opposed freezing the CSG scale, and they unwound other revenue items such as the employer levy on meal vouchers and an apprenticeship exemption, reshaping the revenue package.
  • In a confused sequence, MPs narrowly voted 117–113 to abolish the C3S, a levy worth about €5.4 billion, prompting a request for a second deliberation to correct the result after claims of mis-votes.
  • Two LR amendments lowering the cost of overtime for firms with more than 250 employees were adopted, with the budget impact put at under €150 million by the public accounts minister.
  • The Ministry for Relations with Parliament urged deputies to pass the revenue chapter so spending articles can be examined, as the government flags deficit risks and some opposition groups weigh abstention to allow the debate to proceed.