The cabinet has presented its plans to curb disability benefits as part of efforts to shore up the social security insurance scheme.
Interior Minister Didier Burkhalter said the aim was to save about SFr325 million ($368 million) annually and to liquidate the multi-billion debt by 2025.
“It is the final stage of reforms to recapitalise the disability insurance system,” he told a news conference.
The proposed reform foresees an overhaul of the staggered benefit system and promotes the re-integration of disabled people into the job market.
About 26,000 people, mainly those with mental disabilities, will see their benefits cut, if the proposal wins approval by parliament.
However, the main political parties, trade unions and organisations for the disabled have come out against it amid threats to launch a referendum.
Centre-left parties and trade unions criticised the measures as a “poverty trap”, while the rightwing and centre-right said the plans did not go far enough or unjustifiably targeted families with disabled children.
At the end of 2010 about 280,000 people were eligible for disability benefits.
In 2009 voters approved a temporary tax increase to fund the insurance system, and last March parliament approved measures to promote re-integration into the job market.