New employer levy on compulsory retirement payments (25% then 50%)

Article 16 of the 2008 Social Security Financing Act creates a levy payable by the employer on the payments made when it retires an employee (Article L. 137-12 of the Social Security Code). The rate is 25% for payments made from 11 October 2007 to 31 December 2008, then 50%. Revenue goes to the national old-age insurance fund (CNAV). The government states its aim is to discourage compulsory retirement, whose payments were until then largely exempt.