Parliament moots reform of invalidity benefit

A long road ahead for reforming invalidity benefit Keystone

Parliament is this week to discuss ways of curbing the spiralling cost of the invalidity benefit scheme, which currently has debts of SFr6 billion ($4.6 billion).

As a first step, the House of Representatives is to debate a plan aimed at reducing the number of appeals from unsuccessful applicants.

All political groupings are agreed that Switzerland’s invalidity benefit scheme is in urgent need of reform. Last year, the scheme had a deficit of SFr1.6 billion, and debts of over SFr6 billion. Future projections show costs continuing to spiral.

Attempts at reform have so far come to nothing. Last year, voters blocked government plans to raise more revenue for the scheme from increases in value-added tax (VAT), after the Right lined up against the proposal.

Some relief has been provided by the sale of National Bank gold, the proceeds of which – some SFr7 billion – will be used to prop up the state pension and the invalidity scheme.

Controversy over reforms has been high since Christoph Blocher, of the rightwing Swiss People’s Party, blamed what he called “bogus invalids” for abusing the system, in a newspaper interview in 2003.

Blocked

His party has consistently blocked plans to fund the scheme with an increase in VAT, arguing that structural reforms are needed before more money is pumped into the system.

After voters turned down the VAT increase, the government changed tack and submitted a plan to cut the scheme’s costs, along with an amended proposal to raise money.

The savings target is around SFr596 million per year, which would be achieved by introducing a more restrictive definition of invalidity.

Where revenue is concerned, the government wants to increase the proportion of people’s salaries devoted to the scheme from 1.4 to 1.5 per cent, and to raise VAT by 0.8 per cent.

The debate over reform is destined to preoccupy parliament for several months. This is largely because discussion of the revenue question will have to wait until the government’s cost cutting plan has been debated.

Voters will also be asked to decide on a plan by the centre-left Social Democrats, who want profits from the National Bank to be pumped into the state pension and invalidity schemes.

Appeals procedure

Before tackling the substance of the reform, the House of Representatives is to debate a formal revision of the appeals procedure, in the event of disagreements over the awarding of invalidity benefits.

At the end of June last year, the government decided to submit this revision to parliament as a matter of urgency.

The revision above all calls for applicants to be allowed to make their case for benefits while the application is being considered. At present, applicants must wait until a decision is made, and then appeal if the benefits are turned down.

The proposed system, which was used before 2003, is expected to reduce the number of appeals.

A further step would be to make applicants pay the costs of appeals to the cantonal courts.

Legal arguments

The House’s Public Health Committee has also revived a proposal discarded by the government, under which the Federal Insurance Court would only be able to consider legal arguments when deliberating on an appeal.

Though the changes may appear technical and formal, the revision seems likely to spark the first parliamentary battle over the reform of the invalidity scheme.

Already approved by a small majority at the committee stage, in full session it is bound to meet with strong opposition from the left and from parliamentarians closely linked with disabled persons’ associations.

Opponents question the claim that the revision will simplify the appeals’ procedure, and point out that the decision to abandon the “prior-investigation” procedure in 2003 was taken precisely with a view to standardising social insurance procedures.

The proposed measures would make appealing to the courts more difficult, without guaranteeing any real reduction in costs.

In addition, the idea of limiting the insurance court’s competence to legal arguments only was rejected last year by the House, not least because disabled persons’ associations had threatened to force a referendum against the change. Now their threats are again influencing the debate.

swissinfo, Andrea Tognina

Key facts

Last year the invalidity benefit scheme had a deficit of SFr1.6 billion and debt of SFr6 billion.
Between 1992 and 2004, the number of people claiming invalidity benefit rose from 3.2% to 5.2% of the working population.
Most claims are for mental health problems, back pains and injuries.
The government wants to save Fr596 million a year by making access to benefits more restrictive.