Social protection for a creator or buyer

In this article, we will discuss the theme of social protection. To find our other themes, do not hesitate to browse our other articles on the subject!

Here are the different points covered in this article in a simple and concise way:

– Self-employed worker or employee-type social protection?

– TNS “Daily sickness benefits”

– TNS “Complementary pension”

– “Job loss insurance” manager

– TNS “Death and disability insurance”

– TNS “The Mutual”

– The social protection of the manager subject to the general scheme

Self-employed worker (TNS) or

employee-type social protection?

Today, given the evolution of company law, you have the choice of your type of social protection.

There are two main types of social protection scheme: the scheme for self-employed workers (TNS) and the general social security scheme.

If the manager benefits from the general social security system, his company will publish a payroll for him as for an employee. His social protection scheme will be identical to that of a managerial employee.

Following the publication of a decree in the summer of 2019, a daily “unemployment” allowance of €26.30 (€800 per month) for a maximum of 182 days (6 months) may soon be granted to company directors.

This “unemployment” compensation concerns:

– Employee managers: minority managers of SARLs, managers of public limited companies and simplified joint stock companies, etc.

– Self-employed workers whose company or company is subject to liquidation or receivership subordinated by the court to the replacement of the manager: craftsmen, traders, farmers, liberal professionals, etc.

But under conditions:

– Be able to justify a self-employed activity, over a complete period of at least 2 years (under the same company before liquidation or recovery)

– Have received at least €10/year in professional income during the last 000 years of employment

– Benefit from resources (different from self-employed activity) of less than €559,74

– Be actively looking for a job

In everyday language, we speak of “employee” type protection even if the manager does not have an employment contract.

This scheme applies to the chairmen and managing directors (including assistants or delegates) of SAs and SASs.

This regime also applies to the managers of limited liability companies who do not own with their co-managers, their spouse (or PACS partner) and their non-emancipated minor children more than 50% of the capital of the company. He is then called “minority manager”.

For individual entrepreneurs, SNC partners, majority managers of SARLs, managing partners of EURLs, etc., the system for self-employed workers applies.

This plan (which is described below) is special. The manager does not have a payroll. The partners of the company vote on its remuneration. The manager then deducts this remuneration from the company's bank accounts.

TNS social protection “Daily sickness benefits”

The self-employed worker scheme (called TNS) poorly protects sick managers in terms of daily sickness benefits.

The amount of the daily allowance depends on your average annual income based on the last three years. It cannot exceed the social security ceiling, namely €52,90.

If your average annual income is less than €3754, you will not receive any compensation. If it is higher, your allowances will correspond to 1/730th of it.

Thus, for an income of €1 per month: the daily allowance will be

€1 x500 /12 x 730 days = €30 per month.

Please note: to receive compensation, you must be up to date with your contributions and send in your sick leave within 48 hours.

For certain professions, there are specific regimes:

– the CARCDSF: €93,29/day for dental surgeons and between €16,22 and €46,28/day for nurses;

– the CARMF: between €64,67 and €129,33/day for doctors;

– CARPIMKO: €48,95/day for medical auxiliaries;

– the CNBF: €61/day for lawyers.

It is therefore imperative to take out “Loi Madelin” type insurance.    

Developed by most insurance companies and banks, this form of private health insurance compensates your sick days according to an amount provided for in your contract.

Of course, the higher the amount provided for in the event of compensation, the higher the cost of insurance.

The accumulation of compensation from the insurance and the compulsory scheme cannot lead to receiving more than his usual income.

This insurance can be taken care of by the company. Within the limit of a ceiling of the order of €3000 per year, it is tax deductible. But it will be subject to social charges as well as the CSG and the CRDS.               

Please note: most contracts impose a 30-day deductible in the event of illness. Some contracts provide for a 15-day franchise but their price can be significantly higher.

The risk :

The risk is to insure an amount of compensation that is too low or not to reassess it according to your standard of living.

It is necessary that the amount of the compensation makes it possible to maintain the level of income of the leader. It is therefore necessary to review the amount of compensation regularly.

It is also prudent to check the maximum duration of compensation.

The advice corner:

This is private insurance. Insurance companies are not obliged to accept you. Each company therefore has an individual health questionnaire, or even requests medical visits from approved doctors.

In the event of serious previous illnesses, or probable future health concerns, you may be refused, or the problem detected will not be insured... You will then have to consider another social form for your company which will allow you to benefit from protection. employee-type social.

It is therefore prudent to pass the tests imposed by the insurance company prior to the creation of the company to avoid having to change the legal form of the company in the event that the insurance company does not insure you according to your wishes. .

Maternity leave is now compensated by the TNS scheme:

In case of earned income annual medium over €3

Lump-sum maternal rest allowance: 

– pregnancy €3

– adoption €1

Daily allowance for business interruption for the entrepreneur      

– per day: €55,51

Replacement indemnity for the collaborating spouse         

– per day: maximum €54,33

The social protection of the TNS

The “supplementary pension”

Craftsmen and traders benefit from the compulsory supplementary pension. This single scheme took over the rights that policyholders had acquired before 2013 in the complementary schemes for craftsmen and traders.

The supplementary pension is calculated in points.

His retirement will therefore be determined according to the income declared to the compulsory funds.

Given the risk of receiving a pension that is too low, it is possible to contribute in addition to the compulsory scheme to a private pension for the brand new PER.

This new plan replaces the PERP and the Madelin (retirement) contract, which are no longer offered from October 1, 2020. The savings accumulated on the Perp and the Madelin can be transferred to the individual PER at your request, either at the same manager, or with a new manager,

This contract entitles you to tax benefits and your rights are transferable to other PERs. There are cases of early release.

The PER can be released in annuity or in capital or a mixture of both.

The risk :

The amounts paid are tax deductible with an annual ceiling of around €4.

The amount paid as an annuity at the time of retirement varies according to the mortality table in effect at the time of retirement. But thanks to the happy progress of medicine, the mortality table is improving: therefore, for equal funds paid, the pension will be lower. Some companies still offer contracts with a fixed mortality table. But these are becoming rare.

The advice corner:

The insurance company must be very stable financially in order not to lose your investment.

The company will offer you to place your contributions on various investments whose profitability, but also the risk, can vary a lot. It is prudent to invest your contributions in funds whose risk of default is not too high.

As part of a creation, the immediate subscription of this type of contract does not seem imperative. It is better to earn money before investing! As it is a capitalization contract, waiting a few months is not detrimental. Let's not forget that this is a very long-term funded pension. So the lag of a few months of contribution is not significant.

Often the minimum amount of monthly contribution is 150 € per month.

In creation-recovery, initially, subscribe this amount, you will have time to increase it thereafter.

Finally, we must pay attention to the financial conditions of the transfer of the pension to the spouse. In fact, at the time of retirement, it is possible to choose the “survivor's spouse” option. This alternative always induces a reduction in the pension paid.

The social protection of the leader

"Job Loss Insurance"

Until 2019, managers were not entitled to “unemployment” insurance.

The latter was implemented subject to conditions (see page 29).

Insurance companies have developed private job loss contracts.

These contracts only provide insurance in the event of the company's bankruptcy.

These contracts are of the “Madelin law” type. Within the limit of a ceiling of the order of €1 per year, the contribution is tax deductible. But it is subject to social charges and the CSG and CRDS.

Insurance companies impose a minimum seniority of the company, often two years. In addition, before signing the contract, the insurance company will analyze the company's balance sheets. So, if a risk of bankruptcy appears, the insurance company will refuse to sign a contract.

The risk :

It is imperative to have a clear understanding of when the company will disburse the funds in the event of business difficulties. Indeed, between the first cash flow concerns and the closing of the compulsory liquidation, it can take many months.

The duration of compensation also varies according to the contracts.

The advice corner:

Very rare in practice. This insurance is only recommended for managers whose probability of finding salaried employment is very low.

The social protection of the TNS

“Death and disability insurance”

The self-employed worker does not benefit from a framework pension.

In the event of total and permanent invalidity, the annual pension for a craftsman or tradesman corresponds to 50% of his average annual income, calculated on his 10 best years of activity: ie between €650 and €1.

In the event of partial incapacity (loss of work capacity of more than 2/3), the insured can claim an annual pension equal to 30% of their average income: between €470 and €1 per month.

On the death of a working craftsman or merchant, the capital is equal to 8 104,80 € in 2019 (20% of the annual social security ceiling).

Private insurance contracts of the Madelin law type make it possible to compensate for this lack of social coverage.

Legally, it is the same type of contract mentioned for daily allowances.

Within the limit of a common ceiling with daily sickness allowance insurance, the contributions are therefore tax deductible. But they are subject to social charges at the CSG and the CRDS.

The ceiling depends on a complicated formula: for €21 of income: around €000.

The death benefit capital can benefit the person of their choice.

The risk :

The risk is to provide an amount of compensation that is incorrectly assessed according to one's needs.

The amount of compensation must be sufficient to maintain the level of income of the manager and his heirs. It is therefore necessary to review the amount of compensation regularly.

The advice corner:

As with the daily sickness allowance insurance, this is a private insurance. There is therefore an individual health questionnaire, even medical visits with approved doctors.

In the event of serious previous illnesses, or probable future problems, you may be refused, or the problem detected will not be insured... You will then have to consider another social form for your company which will allow you to benefit from social protection of salaried type.

In addition, the choice of beneficiary must be considered. Should the spouse or children benefit?

Finally, depending on changes in your private life (divorce for example), you should think about changing the choice of beneficiary. Indeed, it is the person registered as beneficiary in the contract who will receive the death benefit even if this choice has become absurd over the years, and even if it deprives your children...

The social protection of the TNS

"The Mutual"

The choice of mutual health insurance is free. The self-employed worker can either take it out as part of personal insurance, or take it out through his company as part of Madelin law insurance.

Within the limit of a ceiling, the contributions are therefore tax deductible. But they are subject to social charges and to the CSG and the CRDS.

Only the contributions paid for the director and his children can be tax deductible.

The risk :

It is totally imperative to be covered in terms of health insurance.

The advice corner:

You have understood: it is very risky to live without this protection. However, if your spouse already benefits from mutual insurance, you may be able to benefit from it and not subscribe to a new organization.

The company will also have the possibility of refusing you a contract if your health questionnaire or if your medical visit turns out to be negative in their eyes.

The mutual must be chosen according to its guarantees. If your children are young, you may need to choose an effective mutual insurance company for dental care. Later, the mutual should rather cover the costs related to the correction of the sight…

The social protection of the leader

subject to the general scheme

The managers of SA and SAS benefit from the general social security system. That is to say that the basic social protections are the same as those of an employee.

However, they do not benefit from the same unemployment insurance (see page 29).

On the other hand, they must contribute to a framework pension fund and to a framework provident fund in the event of death or disability.

The general social security scheme applies regardless of the percentage of ownership in the capital of the SA or the SAS.

These managers can subscribe through the company to:

– a supplementary private pension in addition to their supplementary executive pension;

– private unemployment insurance;

- a mutual.

The “article 83” type private supplementary pension is now called: The “PER Entreprises” open to all or part of the employees in addition to the manager. The amount of contributions is fixed, with no guarantee of the level of benefits paid on retirement.

Each beneficiary employee has an account into which the company pays a fixed contribution, often a percentage of the salary, possibly supplemented by an employee contribution if the agreement provides for it. The employee can also, since the pension reform of November 9, 2010, pay voluntary contributions. There are therefore 3 possible power sources:

– mandatory employer contributions;

– mandatory employee contributions;

– individual and optional payments by the employee, which may include transfers of days from the time savings account (CET) or days off not taken, up to a limit of 10 per year.

The PER allows an exit in annuity or in capital, a payment in the event of acquisition of the principal residence, a total portability.

There is also a form of retirement savings called “section 82”. The principle is very simple, the company pays money for an employee to a private pension fund. This payment is considered as a salary and therefore taxed at the fiscal and social level. On the other hand, at the time of retirement, the beneficiary can obtain the payment in one go of the capital constituted, without tax because the latter has already been paid.

The risk :

Supplementary pensions must be set up for a college of individuals within the company. So, in most cases, the contract will be put in place for an executive college or all the staff.

The amount of pension, unemployment and private mutual insurance paid annually is limited fiscally and socially to a combined percentage of the executive's gross salary and the social security “A” ceiling. Beyond that, the insurance is considered as a salary supplement, and therefore subject to social charges and income tax. In all cases, the manager will pay the CSG and the CRDS on these contributions.

The advice corner:

The choice of the type of social protection is an “intimate” choice. Of course, if you have (or have had) health problems that prevent you from subscribing to Madelin law type insurance, it is imperative to benefit from the general social security system through an SA or an SAS.