New Year heralds legal changes
It will be harder to get disability benefit in Switzerland as of January 1, but married couples will be less penalised by the taxman as new legislation is introduced.
Illegal work will also face stiffer penalties while data protection rules are tightened – just a few of the 800 changes to Swiss federal laws that are being implemented in 2008.
Changes to Switzerland’s social security system – part of ongoing measures to shore up its finances – mean that it will become more difficult to claim disability benefit. It will only be granted as a last resort, based on a person’s last salary and no longer taking into account career prospects.
At the same time every effort will be made to keep people in the workforce and identify at an earlier stage those no longer able to work for health reasons.
The government will also be looking to make savings in the asylum sector. Social aid will no longed granted to asylum seekers if the authorities turn down their request.
This is a measure similar to that already applied to people not allowed to apply for asylum and approved by voters in 2006. The aim is to convince people to leave the country as soon as possible, according to the government.
Switzerland will also be taking a closer look at illegal work. Each year, up to SFr40 billion ($35.36 billion) is not declared to the taxman and the social security services because of moonlighting.
Under the tough new laws fines for employers aiding and abetting moonlighting could be raised and repeat offenders could lose state business and subsidies. Offending companies are blamed for distorting competition in the market by illegally saving on staff costs.
However, measures will also be taken to reduce the paperwork for employers who hire workers on low wages. They will soon only need to fill out a single form for social security contributions if employees earn no more than SFr19,890 a year or if the total wage bill is SFr53,040 or less.
Worth it now?
Married couples are among the biggest beneficiaries of changes to the tax system this year, which should level the playing field with unmarried couples and put an end to ongoing complaints of discrimination.
They will be able to deduct up to SFr12,500 in a dual-income household. An additional tax allowance of SFr2,500 will be granted to all married couples to prevent new tax differences between dual and single-income households.
Married couples will however not notice any effects before 2009. The taxman stands to lose SFr650 million with this single change.
Individual rights will benefit from tougher rules as of now. People targeted by data collection or processing about issues such as their health or religion will be given for example wider knowledge about these procedures.
The federal data commissioner will also have a right to appeal against procedures that contravene data protection laws.
swissinfo with agencies
Friedrich Schneider, a professor of economics at the Johannes Kepler University in Linz, Austria, has studied the issue of illegal working worldwide.
Last year, figures he released for Switzerland – which do not take into account activities such as drug trafficking – showed that in 1975 moonlighting made up 3.2 per cent of gross domestic product (GDP). By 2003, it was 9.5 per cent. However, in 2005 it fell to nine per cent and in 2006 to 8.5 per cent.
For 2007 Schneider predicted a figure of around 8.2 per cent but the government’s estimate was around nine per cent.
According to Schneider, the number of people paid cash in hand in Switzerland is around 490,000, or about 15 per cent of the workforce.
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