Lecornu Secures Last-Minute Compromise on Softened CSG Increase for 2025 Social Security Budget

On December 4, 2025, the French National Assembly narrowly adopted a softened increase in the Contribution Sociale Générale (CSG) on capital income, a key element of the Social Security Finance Bill (PLFSS). The measure was introduced by Minister Sébastien Lecornu and passed with 177 votes in favor against 84 opposing, amid 92 abstentions. This last-minute compromise came after intense debate and concessions from the government.

The approved amendment raises the CSG rate to 10.6% specifically on certain capital income to fund dependency care, termed the "financial contribution for autonomy." For other capital income categories including property income, capital gains, life insurance, and savings plans, the CSG remains at the current rate of 9.2%. This selective increase is expected to yield approximately 1.5 billion euros for social security funding. Public Accounts Minister Amélie de Montchalin highlighted that this approach secures additional revenue while shielding middle-class citizens from heavier burdens.

Originally, the left had proposed a broader CSG increase across all capital income aiming for a 2.8 billion euro yield, a plan harshly criticized by right-wing parties as harmful to small savers. Reflecting this opposition, the government abandoned a controversial proposal to double medical franchises, which was forecasted to generate 2.3 billion euros but lacked public and political consensus.

Additionally, the government raised the target for health insurance expenditure growth from 2% to 2.5% to accommodate rising costs. These adjustments reflect efforts to balance social welfare funding needs with political feasibility and public acceptance.

The vote took place amid broader political challenges, including a decline in President Emmanuel Macron's popularity to 15%, the lowest since his 2017 election. The government also faces complications in international relations after a National Rally-led vote in the Assembly blocked an agreement with Algeria.

This compromise on the CSG increase represents a critical moment for France's social security financing, reflecting the government's struggle to implement fiscal reforms acceptable to diverse political and social constituencies. Future developments will hinge on how effectively these new measures bolster dependency care financing without triggering broader political fallout.