Wealth — Subsidiary health contribution (CSS L. 380-2)

PUMa & the subsidiary contribution:
the rules as they stand today

The Protection Universelle Maladie (PUMa), introduced in 2016, replaced the former CMU scheme and guarantees continuous health-cost coverage for anyone residing in France on a stable and lawful basis. It comes, however, with a subsidiary health contribution (CSM) codified in article L. 380-2 of the French Social Security Code, which targets households whose resources derive mainly from capital (financial investments, real estate, capital gains) and whose earned income is low or non-existent. The rate, initially set at 8% when the scheme was created, has been gradually reduced to 6.5%. This page summarises the rules currently in force and the available optimisation strategies.

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— In brief
Applicable provision
CSS art. L. 380-2
Current rate
6.5% (initially 8%)
PASS 2025
EUR 47,100
Earned-income threshold
20% of the PASS = EUR 9,612 (2025)
Cap
8 PASS = EUR 376,800 (2025)
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A contribution aimed at private investors, to be anticipated and calibrated

The subsidiary health contribution (CSM) under article L. 380-2 of the French Social Security Code targets households that reside in France on a stable basis (more than 6 months a year) and draw the bulk of their resources from capital (investments, real estate, capital gains), with little or no earned income. Typical profiles: private investors living off capital, retirees with significant wealth, family wealth-holding companies, young heirs, executives between two positions, expatriates returning to France.

The contribution base consists of capital income (interest, dividends, capital gains, rental income), reduced by an amount equal to 50% of the PASS (EUR 23,550 in 2025), which operates as a triggering threshold rather than a classic allowance: the contribution is only due above that level. The base is capped at 8 PASS (EUR 376,800 in 2025). The rate is now 6.5%; the historical rate of 8% (2016) has since been lowered. The contribution is tapered according to earned income: where earned income exceeds 20% of the PASS (EUR 9,612 in 2025), the contribution decreases until it reaches zero.

What is at stake: the CSM can amount to tens of thousands of euros a year for significant estates. Several strategies can reduce or neutralise it, such as receiving sufficient earned income, structuring capital income (accumulation versus distribution) or reviewing the place of residence. In this respect, a distinction must be drawn between tax residence (within the meaning of article 4 B of the French Tax Code) and social-security residence (within the meaning of CSS art. L. 111-2-2, i.e. affiliation to a social security scheme): PUMa and the CSM depend on social-security residence, not on tax residence.

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5 key features to master

1. Scope of application

The CSM applies to persons residing in France on a stable and lawful basis (more than 6 months a year within the meaning of CSS art. L. 111-2-2, i.e. social-security residence, to be distinguished from tax residence under article 4 B of the French Tax Code), affiliated to PUMa, whose earned income is below 20% of the PASS (EUR 9,612 in 2025). Recipients of retirement or invalidity pensions are exempt, subject to conditions (CSS art. L. 380-2), provided they meet the stable and lawful residence criteria, as are working persons with sufficient earned income. The statement that pensioners are excluded is too categorical: it is the status of pension recipient that opens the exemption, subject to conditions.

2. Calculating the base

The base consists of the capital income of year N-1 (interest, dividends, gains on securities, rental income, certain exceptional income), reduced by an amount equal to 50% of the PASS (EUR 23,550 in 2025), which operates as a triggering threshold for the contribution rather than a 50% allowance on the income itself. The base is capped at 8 PASS (EUR 376,800 in 2025); above that level, capital income no longer generates any CSM.

3. Calculation formula (tapered, indicative model)

The formula combines the base with a tapering coefficient linked to earned income. As an indicative model (the exact formula is set by decree and may change): CSM ≈ 6.5% × (A − 0.5 × PASS) × (1 − R / (0.2 × PASS)), where A = capital income and R = earned income. If R = 0, the coefficient equals 1 (full contribution). If R ≥ 0.2 × PASS, the coefficient equals 0 (no contribution). The tapering makes the trade-off between earned income and capital income highly sensitive; every simulation must be validated case by case.

4. Optimisation strategies

Several levers are available: (a) generating earned income at least equal to 20% of the PASS (EUR 9,612); a company officer paid at least at that level escapes the CSM; (b) accumulating rather than distributing financial income (life insurance, capitalisation contracts, holding companies) to defer the realisation of income; (c) reviewing tax residence for significant estates (partial departure or expatriation).

5. Application to non-residents

Non-residents for tax purposes are, in principle, not liable for the CSM, provided they do not reside in France on a stable basis. However, an unrecognised French presence (6 months or more per year) or a partial reintegration into the French tax household may trigger liability. Particular vigilance is required for French-Swiss or French-Belgian taxpayers who have retained strong family ties in France.

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Our approach at the firm

The firm advises taxpayers holding significant estates on the qualification of their situation with respect to the CSM, forward-looking calculations and optimisation: structuring of income (accumulation versus distribution), interaction with professional remuneration, review of tax residence, and defence in the event of a challenge by URSSAF.

For the typical profiles (private investors living off capital, retirees, family wealth-holding companies), the firm builds multi-year simulations that factor in the evolution of income, optimisation through wealth-planning instruments, and the combined impact with other taxes and levies (income tax, social levies, IFI (real-estate wealth tax)).

— Frequently asked questions

What is PUMa?

The Protection Universelle Maladie (PUMa), created in 2016, guarantees health-cost coverage for anyone residing in France on a stable and lawful basis, regardless of professional status. It replaces the former CMU schemes. The CSM (subsidiary health contribution) is a contribution owed by PUMa beneficiaries whose capital income exceeds certain thresholds.

What is the exact rate of the CSM?

6.5% today. The rate was 8% when the scheme was created (2016) and has since been gradually reduced. It is applied to the capital-income base after an allowance of 50% of the PASS, with a downward tapering according to the taxpayer's earned income.

Who is liable for the CSM?

Persons residing in France on a stable basis (more than 6 months a year, within the meaning of social-security residence under CSS art. L. 111-2-2, which is distinct from tax residence under article 4 B of the French Tax Code), affiliated to PUMa, whose earned income for the previous year is below 20% of the PASS (EUR 9,612 in 2025) and whose capital income exceeds the triggering threshold of 50% of the PASS (EUR 23,550 in 2025). Recipients of pensions (retirement, invalidity) are exempt subject to conditions (CSS art. L. 380-2, notably stable and lawful residence), as are working persons whose earned income exceeds the threshold.

How is the contribution calculated?

As an indicative model (the exact formula is set by decree): CSM ≈ 6.5% × (A − 0.5 × PASS) × (1 − R / (0.2 × PASS)), where A = capital income and R = earned income. Example: an investor with no earned income (R = 0) and EUR 100,000 of capital income. Base ≈ 100,000 − 23,550 = EUR 76,450. Contribution ≈ 6.5% × 76,450 × 1 ≈ EUR 4,969. If the same taxpayer received EUR 5,000 in salary (around 10% of the PASS), the coefficient would be (1 − 0.5) = 0.5, giving a contribution of approximately EUR 2,484. Every simulation must be validated case by case.

How can the CSM be reduced or avoided?

Several strategies: (1) generating earned income of at least 20% of the PASS (EUR 9,612 in 2025); above that level, the contribution is cancelled; (2) accumulating financial income (life insurance, capitalisation contracts) to defer the realisation of income over time; (3) structuring through a wealth-holding company that accumulates income before distribution; (4) reviewing tax residence for significant estates.

Are non-residents concerned?

In principle, no. French tax non-residents who do not reside in France on a stable basis (less than 6 months a year) are not liable for the CSM. However, mixed situations (taxpayers resident abroad who have retained stable ties in France, expatriates partially reintegrating) can trigger liability. Vigilance is required for French-Swiss, French-Belgian and French-Luxembourg cross-border commuters who have kept a household in France.

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