Severance pay: exclusion from the contribution base limited to three social security ceilings

Article 18 of the 2011 Social Security Financing Act rewrites the twelfth paragraph of Article L. 242-1 of the Social Security Code: the share of severance payments on termination of an employment contract or forced removal of a corporate officer that is exempt from income tax is excluded from the contribution base only up to three times the annual social security ceiling, compared with six times before. The base for the CSG and CRDS is aligned on this rule. As a transitional measure, the limit stays at six ceilings for payments made in 2011 for a termination effective by 31 December 2010 or under a redundancy plan notified before that date, and for 2011 terminations within the amounts set by a collective agreement in force on 31 December 2010. The limit was lowered to two ceilings in 2012.