Explained: Who has to pay France's annual healthcare charge

What is this?

The cotisation subsidiaire maladie (CSM) is a social charge that helps pay for France's state-funded health system. Technically it is a social charge rather than a tax, but in all practical ways it functions like an extra tax.

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Anyone who is working in France pays the CSM (also known as 'PUMa'), but for workers it is deducted from their salary each month (for employees) or by URSSAF (for self-employed people) along with a whole bunch of other deductions including income tax, pension contributions and unemployment insurance.

Early retirees are the largest group to get this bill, but it is possible for digital nomads as well. Generally, it is applied to people living off investments.

Because the CSM is classed as a social charge, not a tax, it can be charged even on income that normally would be 'tax free' in France under international treaties.

When do they arrive?

The bills are sent in the third quarter of the year, usually November. They are separate and do not form part of the tax assessment that the tax office makes in the summer, after you have made your annual tax declaration.

How much are they?

The charges are levied according to your income, using a complicated formula that is explained in full here.

There is a cap on the amount of CSM that can be charged in a year - in 2024 the maximum amount is €22,604. This would only be levied on the highest earners - people who make €370,000 a year in 'passive income' eg income from property or investments.

For most people, the amounts are a lot lower. 

So who has to pay it?

There are a lot of people who are exempt from CSM charges, including;

• Full-time workers and many self-employed people (because the money has already been deducted from their income)
• People collecting EU/EEA/UK or French pensions
• Those who receive disability benefits (ie pension d’invalidité)
• People on unemployment benefits
• The partner, spouse or dependent child of any of the above groups

Typically, people who get a CSM bill are early retirees, as they are not 'paying in' to the system in any other way.

In the case of early retirees from the EU/EEA or UK, once they reach state pension age in their home country they are eligible for the S1 scheme in which their home country reimburses their healthcare costs. Once they are registered with S1, they are fully exempt from CSM charges.

For non-EU retirees it depends on whether their home country has a reciprocal agreement on healthcare costs - which the USA does not because it does not have a state-funded healthcare system. As such, it is possible for American retirees to be charged CSM.

You mentioned mistakes?

Yes, it's complicated partly because there are a lot of exemptions and partly because the system is set up with French people in mind, and foreign retirees often find themselves incorrectly billed by URSSAF employees who are not sure how things work when it comes to foreigners.

Equally there are plenty of people - especially American pensioners - who by the letter of the law ought to be billed, but are often not charged the CSM fee.

If you think you have been sent a bill in error, you can contest this directly with URSSAF - more details HERE.

You can find a full explanation of exactly how CSM charges work, and who they apply to, HERE.