Inflation continued to accelerate in April to reach 4.8% over one year, according to an initial estimate published on April 29, 2022 by INSEE. The final estimate is to be released on May 13. Over the whole of 2021, it was “only” 1.6%, which was nevertheless the highest level since 2018. A rise in prices that the French perceive on a daily basis when they go shopping and their full tank of gas, despite the state-funded pump discount scheduled to last until the end of July. But inflation also has other consequences. Rents If the contract provides for it, the rent can be revised on the initiative of the private lessor once a year, either on the anniversary date, or on another date fixed by the lease. For social housing, the review takes place each year on 1 January. In all cases, it is the rent reference index (IRL), given each quarter by INSEE, which serves as the basis for calculating the new amount. Problem, it is directly linked to the evolution of consumer prices (excluding tobacco and rents). In the first quarter of 2022, the IRL increased by 2.48%. We have to go back to the 2008 crisis to find such a leap. And that’s just the beginning. The only consolation for tenants, since 2015 (following the Alur law), the revision can no longer give rise to a retroactive catch-up. Owners could previously claim recalls up to 5 years old! From now on, the revision only applies to future rents from the date of the request. Smic The amount of the Smic is automatically revalued on January 1 of each year according in particular to inflation. But it is also during the year, if the consumer price index increases by at least 2% compared to the index observed during the last change in the amount of the minimum wage. Hence a new revaluation on May 1, 2022 (€1,302 net per month for 35 hours), and another to come before the summer as already announced by the Ministry of the Economy. The government can also decide on a boost to go beyond these mechanical revaluations, but this has never happened since July 2012. Read also: MAP. Inflation, a global headache… And not just in France Taxes The income tax scale is made up of five rates: 0%, 11%, 30%, 41% and 45%. They each apply to a bracket of income, the limits of which are traditionally revalued from one year to the next, according to forecast inflation. However, this must be provided for by the finance law. one side, what they were given on the other. For the 2022 declaration of 2021 income, in progress, the scale has therefore been increased by 1.4%. Because they are directly indexed to this, other values have also been reviewed, such as the ceiling for the flat-rate deduction of 10% for professional expenses (raised to €12,829) or that for the deduction of alimony paid adult children (€6,042 per child). Social aid Active solidarity income, activity bonus, disabled adult allowance, family allowances… inflation. Far from the 4.8% mentioned by INSEE for April. Because since 2016, it is the price increase observed over the last twelve months that is taken into account. And not inflation forecasts for the coming year. This has the merit of being simpler, but poses problems when inflation accelerates as at the moment. So that benefits do not lag behind, the Minister of the Economy, Bruno Le Maire, announced on the evening of Emmanuel Macron’s victory that a boost would take place this summer. Pensions In principle, pensions should keep pace with inflation. And yet, with the help of a few sleight of hand, the rule has often been undermined in recent years. With the additional increase in levies, pensioners have generally lost out. Before being re-elected, the President of the Republic Emmanuel Macron promised to index them to inflation “from this summer”.
Rents, taxes, family allowances… Here is what will increase with inflationEXPAND