The Swiss have voted on a cost-cutting reform of the state disability insurance scheme which has run up huge debts over the past decade.This content was published on June 17, 2007 - 12:03
Supporters say the cuts are needed to prevent the social security system from financial ruin, while opponents argue they come at the expense of weaker members of society.
Parliament has approved the reform, but two small groups representing the disabled – supported by centre-left political parties and trade unions – challenged the amendments in a nationwide vote.
The proposed changes foresee annual spending cuts of about SFr500 million ($402 million) in the long term and a 20 per cent reductionin the number of new beneficiaries each year.
"Insurance takers are faced with too many cuts in benefits. The reform - that's the worst shortcoming – fails to give an incentive to employers, or to put pressure on them to hire disabled people," says Silvia Schenker of the centre-left Social Democratic Party.
Other opponents argue the planned reform is unfair towards the disabled and claims to reduce expenditure while actually burdening welfare schemes with additional cases.
Supporters of the cutbacks, including the centre-right and rightwing parties, the government and the business community, say these are necessary to save the insurance scheme from financial ruin.
The number of beneficiaries increased to 256,300 while the insurance scheme notched up debts of SFr9 billion last year. It had dropped into the red in the 1990s as a result of a rise in cases of psychological disorders.
The top priority of the reform is to promote the reintegration of claimants into the job market by improving measures to prevent them dropping out in the first place and being quicker to provide support to those diagnosed unfit for work, according to supporters.
"Some form of mild pressure on beneficiaries helps them reintegrate quickly into the labour market," says Pierre Triponez of the centre-right Radical Party and director of the Association of small and medium-sized enterprises (SMEs).
Those in favour of the changes add that a legal obligation for employers to hire a certain number of disabled staff is counterproductive and presents a financial risk particularly for SMEs, which form the backbone of the Swiss economy.
The campaign ahead of Sunday's vote was marked by a series of controversial pictures and by claims of widespread abuse of Switzerland's social security system.
The trade unions launched a set of postcards depicting some government ministers as physically disabled, prompting mixed reactions.
For its part, the rightwing Swiss People's Party made allegations that particularly foreigners were using sick pay as an easy way of tapping into the benefit system.
Initially political support for the small groups behind the referendum was limited and the Social Democrats' grassroots had to force the party leadership to join the campaign.
The country's two largest organisations for the disabled have refused to back the referendum, saying the reform is a step in the right direction despite certain shortcomings.
Latest opinion polls gave supporters of the revision of the disability insurance scheme a ten per cent lead over opponents, but a large number of citizens remained undecided.
The vote comes as parliament is grappling with plans to shore up the funding for the insurance system, including a proposal to increase Value Added Tax.
The scheme is financed by a 1.4 per cent deduction from salaries, with the federal authorities providing additional funding.
swissinfo, Urs Geiser
The number of beneficiaries increased to 256,300 last year from 173,216 in 1997. This includes the 20% receiving a partial disability pension.
3.2% of the total population claimed disability benefits in 1990, the figure rose to 5.3% in 2005.
The percentage of claimants unfit for work for psychological reasons increased to 37.5% from 28% in the same period.
The disability insurance scheme, which was set up in 1960 and is administered by the state old age pension scheme, made a deficit of SFr1.6 billion and accumulated debts of SFr9 billion last year.
For the first time in the history of the insurance system the number of new beneficiaries dropped in 2006 also as a result of stricter checks introduced in 2004.