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PUMA, AE and phasing out of 'ayant droit'


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No, idun, there are still plenty around who don't know the rules and those who have come in the last few years and entered the system via AE, as has been frequently advised despite warnings about things like that, are often the most ill informed.

Even now, there are people enthusing about this new system all over the place and saying that the French have now accepted EU law that they have to let people in the system, even saying that only stable residence is required and not accepting that income is still relevant and there is still that little matter of having to be self sufficient.

Remember when there was that extra bit in the CMU residence criteria which mentioned having to have a complete healthcare cover? It was taken out when the French DID accept that they had to let people in as long as they were stably resident and self sufficient. Now, with this new system, it's been put back in again. There is the argument that one could use an EHIC card for the first three months if the rules say you aren't considered as properly resident during that period but isn't the truth that the EHIC isn't supposed to be used as from the moment you arrive with the intention of staying permanently?

Although I think it's more likely that the new system is a way of getting extra money in, it does make you wonder if they're planning on insisting on that again and an article in frenchproperty.com about the new system takes the view that this is the French trying to start up the five year exclusion thing again. See http://www.french-property.com/news/french_health/protection_universelle_maladie/

They don't seem to have picked up on the extra cotisations that are going to be payable for a lot of people though. Even those who are't caught out because of income will be caught out if one of a couple is ayant droit, when they have to join PUMA individually in 2020 - or before in some cases as people already seem to be being moved over if their dossier is processed for any reason.
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The rules are constantly changing and what was true one day isn't the following ..that's what it's like. I don't really see what the big fuss is. People are still coming and going and getting healthcare when they need it and just finding their own way round the system and maybe they will pay a big more, of maybe not..who knows, but it's not legislation just set up to catch out immigrants.
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It might not be a big thing to you, who have already figured out that you can avoid paying cotisations on your other income. However, for those who can't, it's a big problem. I was recently in discussion with someone for whom this could mean an extra forty thousand euros in cotisations will need to be paid. Whatever the discussion there could be around whether it's fair play or not and whether such cotisations should be paid or not, the fact is that the people involved moved over here when it wasn't necessary and this goal post changing could mean their whole decision to move here may now have to be reversed - especially if a subsequent step turns out to be the banning of private insurance again.

I was planning to set up an ME myself and I'm on my own with three children and a tight budget. The changes could mean I can't afford to do it because I'd have to pay cotisations on my rental income and child support payments which could be more than I'd hope to earn, at least initially. The system of the payment being calculated upon the previous year's income makes it especially precarious for me since my income isn't guaranteed and could stop at any time.

Hopefully if it doesn't look feasible for me then I can manage as I am for a while and make different plans, knowing that if I do lose all my income and need to get into PUMA, I'll be ok because I'm classed as a permanent resident. Many people who have been here for less than five years, if this causes them problems as they've already relied on the old rules, won't be in that position. So yes, it could cause quite a fuss. In any case, I thought it was worth having the discussion to forewarn people, while they still have plenty of time to adjust and plan.

It's not just immigrants who are affected. There are French people getting nervous about this and discussing it too. The suggested solution in one discussion was to add some fictitious income to their business income declarations so that the extra cotisation could be avoided.
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With respect Debra, it's not as if they're going to take all your unearned income off you. Worst case scenario it would be a small percentage,, and then only of income over a certain plafond. They know how much a person needs to live on and the system is designed around that, and it'll work for you the same as for everybody else; you'll only pay extra cotisations if you have sufficient income. Of course people are squeaking but there's a difference between not wanting to pay more, and not being able to afford to pay more. We'd all like a free ride but if somebody asks for the fare, you have to pay it.

I don't understand why you think that starting an ME would disadvantage you. If you don't start an ME and you affiliate on the basis of residence, you will pay the cotisations on that household income if it's above the e threshold. If you start an ME but it doesn't earn enough, you'll pay the exact same cotisations, so you won't have disadvantaged yourself, even if you haven't saved a lot. Am I missing something here?

I agree with Linda that you're panicking unnecessarily, but you are absolutely right that people need to be aware and plan ahead, and maybe set aside a sum from this year's income in case it's asked for next year.
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Sorry, yes, you are missing something because I didn't explain my position clearly.

I have mostly been covered by an S1 form from the UK since I've lived in France, issued to my husband. When I separated from him and informed the authorities here and in the UK, I was placed in a limbo period of about two years while the two authorities argued over who was now my competent state. My UK child benefit and associated French ADI payments stopped immediately and I was left without healthcare cover too. I joined the CMU after proving my droit de sejour for a previous five year period. As at the time I had only a small amout of child support income (my UK tenants unfortunately left a month after the separation), I didn't have to pay any cotisations.

Eventually it was decided (after a lot of back and forth and Europa complaints) that the UK is still my competent state and I was back on an S1 again. My now ex husband has to claim child benefit from the UK and I claim ADI here in France (this pays the difference between the UK and French child benefit). This is based upon an EU rule that if I'm not active in France and he is working in the UK and is paying above the amount of UK child benefit in child support, then we're still classed as his dependants even though I am now divorced.

As well as being unable to deal with any of the paperwork re child benefit because it's now all in his name, I can't deal with the healthcover aspect because that's via him. The S1 form has to be renewed annually. I had four months without cover last year because it was late and I'm without cover again this year because the old one ran out in March and the new one hasn't arrived yet. I can't chase it up myself and have to chase my ex up to do it. It's all a bit of a pain and feels precarious as obviously it all relies on him having regular work. I'd much rather have healthcare and access to child benefits in France in my own right. Hence looking at becoming active via ME (or employment if possible).

So I presently don't pay contributions based on the child support I receive or on the rental income that has now been restored. Obviously I would have to if I started an ME and earned below the income limit. I know that is right (though I think it's a bit much taking cotisations on child support payments that aren't sourced in France and so aren't tax deductible in France by the payer) but as you can appreciate, as I am on a tight budget and so have to consider this carefully.

I had a pretty scary time a couple of years ago when most of my income stopped. The income isn't guaranteed and I don't want to risk being in that position again AND having to worry about having cotisations to pay based on a previous year's income.

I'm probably best waiting until I'm a bit more financially secure before risking starting an activity, especially before the way the new system works is clarified. I would be safer finding a job, but that presents it's own difficulties.
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Sorry Debra, it just goes to show you should never make assumptions - I just assumed you were in a 'typical' expat situation.

I see your dilemma. An S1 is a highly desirable piece of paper for expats if you can get one, it comes with a raft of benefits. Would you not also have to pay CSG on your UK rental income if you give up the S1? Another 8 per cent gone.

What price independence, eh.

Bon courage.
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Another consideration for me is it's not just my actual cash income that would be taken into account. When I applied for the CMU (I've just realised it's more than three years ago now) I had to list my property as well as income. The UK house that I couldn't sell or find a tenant for and another house I had in France that I also couldn't sell and couldn't let as it wasn't up to the required standard meant that they added an assumed rental income to my actual income. My mortgage is in the UK so that wasn't allowed for.

The UK house is let but I'm still in a similar position with a 'spare' French property because though I've sold that other house, I've used the proceeds from the sale of it to buy and move into a home of my own and still have the ex marital property to sell (all part of the financial agreement of my divorce). I can't let it because of my financial agreement but it would still involve an assumed rental income being taken into account. I'll obviously breathe a sigh of relief if I manage to sell it - I might be able to stop panicking while watching reports about what will happen to UK mortgage rates then too, as the money will reduce the hefty mortgage.
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I didn't think UK rental income was liable to social charges, regardless of whether you are 'a la charge' of France? It would affect my future pension payments though, and I can access my pension in a few years' time so that is a consideration, but as my pension pot isn't sizeable it won't involve much income so that won't really make much of a difference. I can take a lump sum from it though and I assume social charges would be applied to that regardless.

My main concern is getting rid of the UK mortgage but the problem is that the property I bought with the remortgage amount isn't worth what it was bought for eleven years ago so the sale proceeds alone aren't going to repay it.
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You pay CSG on UK rental income which some people refer to as a social charge, although really it's a tax. CSG is also charged on pension lump sums, even if they are paid tax free in the UK.

Personally in your situation I would avoid ME. I can't see it being any advantage unless you think you can earn more than 8000 pa. You get absolutely no concessions on it, no other protection and the deductions are high. With CMU/PUMA you won't pay anything on income under 9000 plus and then it will be far less than you pay under ME. I still pay CSG on all my other income..that is unavoidable if you are not on a UK S1, so yes I have found a way to get health cover but it probably costs me more than PUMA would. The advantage is that it is very easy to set up, or at least it was. Regarding continuous residence..who knows..the vote on the 23rd may well change that for everyone. I thought the opinion of French property was rather scaremongering..I can't see mass scale eviction from the healthcare cover for those already in the system.
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I realise that the totally sensible thing to have done would have been to stay in the ex marital home until it had sold and not bought somewhere else but used the money to reduce the mortgage. However, the place we lived in was a rural village and my children started lycee, which meant I needed to take them to their bus stop eighteen kilometres away. I also had to take my younger son to his primary school as the village school closed down. This was all a bit of a nightmare on it's own now that there was only me to do the running about but then my car broke down and I had no way of getting them there and they had to stay with friends while it was being fixed.

That experience and the fact that finding work in that area would be impossible and the whole wanting to move on thing (we all had some bad memories from that house) made me decide that we needed to live our lives in a more accessible place with a better possibility of me finding work - and where it didn't matter if my car broke down and I had no money to fix it.

The lycee bus stop is now a half mile walk and also my younger son's primary school is just a little more than that and if I have to, I can walk to Leclerc which is less than two miles away. The same line that takes my older boys to lycee also has other buses throughout the day to get into the local city (a lot of people here take that bus into the city for work as it's cheaper than driving), so we're much better placed should the financial dramas of the past revisit us.
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quote lindal1000 'You pay CSG on UK rental income which some people refer to as a social charge, although really it's a tax. CSG is also charged on pension lump sums, even if they are paid tax free in the UK.'

No, you don't pay it on UK rental income as it's taxable in the UK under the double taxation treaty. Some people were charged it over the last few years but they've since been able to reclaim it. That was probably down to the way they changed how the system worked and how you had to declare to ensure your other income was taxed in the correct band whilst generating the French tax credit as much as anything else. I believe that's been resolved now so it shouldn't happen in future.

The changes to how social charges are designated has only confirmed the idea that they are a tax so that shouldn't change things. What makes you think that the social charges are payable on UK rental income?

I paid social charges on the capital gain on the house I sold but I understand I should be able to reclaim it because of the S1 cover (not even thought of getting into trying that yet as my paperwork is all over the place and I have too much else to worry about just now). The change to calling them a tax would mean that any future property capital gains would be liable but as I'm trying to sell the ex marital home at a loss, it won't affect me.

As I said, I assumed I'd have to pay them on any lump sum I withdraw from my pension fund (not sure it that's the 7.5% I've read that it would cost me or if that's tax and the social charges are in addition to that?) but I'll look into that when the time comes as at the moment I have no idea where I'll be at that point.
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Nice news for those already in the CMU anyway re no cotisations being payable this year.

'Bon à savoir

Si vous étiez redevable de la cotisation au titre de la CMU de base, vous n'avez aucune démarche à effectuer. Vos droits à la prise en charge des frais de santés sont maintenus.

La CMU de base étant supprimée au 1er janvier 2016, aucun appel à cotisation ne sera adressé pour l'année 2016. '

https://www.urssaf.fr/portail/home/espaces-dedies/beneficiaires-de-la-puma-et-de-l/de-la-cmu-de-base-a-la-puma.html
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Is this why we haven't had our virement taken to URSSAF at the end of March and now we're in June we should be paying again, but we've had no communication so are not sure what's going on.

No cotisations??? Can't believe that.
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Just need to add an update/further opinion on the healthcare cover. I linked to the service public site just now to answer someone's query about a carte de sejour and I noticed that the page has been updated quite a lot since the last time I looked at it.

To prove your droit de sejour it actually states that you need the RSA level of income, for one thing. For another thing it states that the healthcare cover in your first year can be proved by having an EHIC card from your country of origin (so no PHI needed).

See https://www.service-public.fr/particuliers/vosdroits/F16003

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quote mogs 'Is this why we haven't had our virement taken to URSSAF at the end of March and now we're in June we should be paying again, but we've had no communication so are not sure what's going on.

No cotisations??? Can't believe that.'

It must be since that's the URSSAF site that the good news came from. They mustn't be able to charge you cotisations for an organisation that no longer exists. I guess they think they'll catch up when they charge all those extra cotisations next year :)
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Thanks Debra, I checked out your links and can understand now why we've heard nothing from URSSAF. Shame they will likely recover the payments next year, as was hoping for a spend up :)

Can you explain how this might affect our situation please as I'm a bit confused. My OH works offshore, I do not work so the old cotisations to URSSAF were based on his salary and tax. From what I understand (is this right?) as I don't work and have no income, but live in France full time will my OH still pay both our cotisations?I currently have my own CV and CV number but still come under his cover.

Thank you
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The changes won't affect you at all, even when you stop being ayant droit, except for the free year this year. It says they're not payable for this year, not in this year, so it doesn't look like they're going to catch up with them later.

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It says on that site

1 justificatif d'assurance maladie : attestation de prise en charge par

une assurance de vos frais de couverture maladie et, éventuellement,

maternité

(pour la 1re année de séjour, la carte

européenne d'assurance maladie ou le formulaire européen de continuité

de la prise en charge dans le pays d'origine est accepté)

But the UK will only under certain circumstances do a prise en charge with regards to the EHICs, ie with an S1 and other specific rules, students, short term contracts etc.

 Otherwise, people are supposed to send them back when they permanently move to France. So any early retirees etc, should not have a card that would  'prove' anything.

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[quote user="idun"]
But the UK will only under certain circumstances do a prise en charge with regards to the EHICs, ie with an S1 and other specific rules, students, short term contracts etc. Well that is the theory, as for the practice..............

 Otherwise, people are supposed to send them back when they permanently move to France. So any early retirees etc, should not have a card that would  'prove' anything. Well that is the theory, as for the practice..............
[/quote]

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For CMU one of the things they sometimes/often (who knows) used to ask for, was confirmation from your previous health provider that they had ceased to cover you. I guess this was on the basis that if somebody already has health cover then they are not CPAM's responsibility. If they still require this you might have to do a bit of careful footwork with the dates, to work it so that you can show you have enough health cover from the UK to meet the requirement for having health cover, but you don't have so much health cover that you are still the NHS's responsibility not CPAM's.
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I warned people about the extra cotisation they may have to pay next year on a facebook group for people in business.  A few insisted that it wouldn't affect AE/ME people.  One of them rang RSI to check and they confirmed that yes, it would affect everybody as everyone will come under PUMA now, regardless of whether or how you are working and paying cotisations.  They will pay their cotisations as normal for their employment or activity and then a supplementary cotisation will be calculated from their tax returns if relevant.

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It makes complete sense, good on them for plugging the loophole, that is the way that it always would have worked for a French taxpayer, lets say a fonctionnaire who paid cotisations on his salary, had a small AE income and some rental or investment income unless I am mistaken.

Still amazed that they would lose a whole year of cotisations whilst still being liable for peoples healthcare but as I have not been following this in detail is it only a small group that is concerned?

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It's everyone in the CMU, Chancer.  I don't know how many there are.

Yes,

Idun, tax too - but at least they will be still collecting money in the

current year whereas with the CMU cotisations they'll lose a year's

income from that from people who aren't working.  

Didn't they

originally think AE would be taken up by people doing a small extra

activity rather than people doing it as their main source of income and

therefore healthcover?  It may have been a surprise just how many took

it up that way and then they realised the implications and how much they

were losing out on cotisations on other income and so now have fixed it
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Is it only people who have been transferred from CMU to PUMA who are getting a year "free" because of the administrative changeover, and if you were under RSI and are still under RSI will the RFR-related exercise kick in this year based on last year's tax return? I'm picking up on what was said about RSI confirming it would apply, and thinking that unusual for RSI to know what's going to happen next week, let alone in 2017! If it does start this year, I foresee a few feathers flying ;-)
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