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Minister warns of collapse of social security

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Interior Minister Pascal Couchepin has warned of a "disaster" if the Swiss reject cost-cutting reforms to the state disability insurance scheme later this year.

This content was published on March 19, 2007 - 16:18

Couchepin, who is in charge of social security, was speaking in Bern on Monday at the launch of the government's campaign ahead of a nationwide vote on June 17.

"Debts will total SFr20 billion ($16.5 billion) by 2020 and there will be no more money available for the disability and the old age pension schemes if we don't take action," he told a news conference.

The ballot is seen as part of efforts to rescue the schemes, which share a joint fund, from financial ruin and avoid the accumulated debt spiralling out of control.

The reforms foresee annual spending cuts of SFr500 million in payments for the disabled and a reduction by 20 per cent every year in the number of new people receiving benefit.

The scheme, which provides financial support for 257,000 people, has been in the red since the 1990s and has run up total debts of SFr12 billion.

Parliament approved the reform last year but two small groups representing the disabled - backed by centre-left parties - collected enough signatures to challenge the decision in a referendum.

The groups argue the planned reform comes at the expense of the weaker members of society who had no real chance of integrating into the labour market.

Reintegration

Couchepin said the reform aimed at promoting reintegration into the labour market and improving prevention, in an effort to reduce the cases of disability benefits.

"The priority is reintegration, not benefits."

He called for fair and humane checks, and criticised those who claimed there was widespread abuse of the benefit system.

His statement was a veiled attack against the rightwing Swiss People's Party, which is against the reforms and against a funding boost for the social security scheme.

Couchepin dismissed demands for a quota system to create more job opportunities for disabled people. He said employers would benefit from financial incentives instead.

"Switzerland is top of the table of industrialised countries when it comes to integrating disabled people into the work force."

Parliament debate

Parliament on Monday resumed debate on plans to shore up funding of the disability insurance.

The House of Representatives and the Senate have to decide whether to increase Value Added Tax, which is currently at 7.6 per cent, or to raise contributions by employers in a bid to ensure the future of the insurance scheme.

It is currently financed by a 1.4 per cent deduction from salaries, with the federal authorities providing additional funding.

Discussions on the issue are set to continue and voters will probably have the final say in 2008.

swissinfo, Urs Geiser

Disability insurance scheme

Total number of beneficiaries: 257,000, including 15%-20% who receive parts of a disability pension.

40% of the beneficiaries are classed as unfit for work for psychological reasons. Experts blame the increase in benefit claimants on the effects of work-related stress and generally a lower tolerance threshold.

The number of new beneficiaries stood at 19,600 last year, down 16% on 2005. It was the first time in the 47-year history of the scheme that there was no increase in spending and the number of beneficiaries stabilised.

In 2006 the insurance scheme made a deficit of SFr1.6 billion according to the Federal Social Insurance Office.

In 2004 voters rejected plans for a 1% increase in VAT to fund the insurance.

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