The Social Security Financing Act (SSFA) for 2016 has been published in the Official Journal on 22 December 2016: Focus on the main measures.
Termination indemnities paid to corporate officers, top executives and employees
Social exemption modified for the termination costs!
Termination indemnities paid to top executives and corporate officers which are non-taxable are exempt from social contributions up to a limit of 2 PASS (i.e. 77 232 euros) provided not exceeding 5 PASS (i.e. 193 080 euros). Failing that, termination indemnities are subject to social contributions as of the first euro. Previously, this limit was 10 PASS.
Consequence of the legislation modification: favourable employees’ Social Security treatment
Rules rewriting leads to abolish, for employees, this limit of 10 PASS. It is important to underline that this 10 PASS limit has not been removed for the CSG/CRDS.
Social Security contributions collection, inspection and URSSAF
Formal notice formalism: strengthening of the right of companies
The content of formal notice, the act under which the URSSAF collects its debt, will be henceforth “clear and motivated” for being valid. A decree will have to define the words “clear and motivated”.
Reassessment procedures in case of supplementary social protection group and mandatory schemes are called into question: a reassessment proportionate to the employer’s breach
Reassessment might be limited to a base corresponding to the situation of employees concerned by the employer’s breach. In this way, the reassessment might be limited to:
- 1,5 times these amounts when the reassessment ground is based on the sole/the fact that the employer did not produce documents like a request for exemption or any other document or exhibit necessary to assess the mandatory and collective nature of the scheme
- 3 times these amounts in other cases
These provisions cannot be applied in case of a particular serious non-compliance of the rules applicable by the company, granting of a personal benefit or discrimination.
Ultimate modification related to the extension of the health insurance
As a reminder, the 14 June 2013 act has planned the extension of a minimal health insurance for all the private sector employees from 1 January 2016. This obligation has to be articulated with the provisions related to the exemption conditions applicable to the employer’s share funding the scheme.
The SSFA has planned (i) a new automatic exemption case for employees in a short fixed term contract or in a temporary contract of less than 3 months provided to be covered by a responsible health insurance. Furthermore, (ii) employer’s minimal contribution should be at least 50% of the funding of the health insurance scheme regardless whether it provides better benefits than the legal minimum basket of healthcare.
Important information from the Social Security Direction on 29 December 2015
The ministry specifies in particular that any change of the legal act not related to the health benefits will not cause the loss of the benefit of the transitional period for the application of the new provisions related to the responsible nature of the health insurance contract. In this respect, the act modification related to the implementation of the funding 50/50, the removal of the seniority clauses or the designated body do not cause the loss of the benefit of the transitional period. The enforceability of this circular letter is nevertheless subject to its official publication.