Reducing financial support for the country’s poorest citizens is triggering heated debates in parliament, with no final decision expected this session. State expenditure has more than doubled since 2000 on so-called supplementary benefits for people who can’t get by on their pension alone.This content was published on September 12, 2018 - 08:00
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What’s at stake?
The almost CHF5 billion ($5.1 billion) in supplementary benefitsExternal link that the state pays to more than 320,000 pensioners a year.
What’s the purpose of supplementary benefits?
According to the federal constitution, the old-age and disability pension schemes should guarantee a living wage, the minimum income necessary for someone to meet their basic needs. Because this is no longer the case with many pensions (minimum CHF1,175, maximum CHF2,350 - or $1,200 to $2,400 - per month), supplementary benefits were created.
Who receives supplementary benefits?
Last year, 322,800 people. To receive supplementary benefits, one has to meet certain conditions such as drawing a pension and living in Switzerland. Cases are assessed individually.
How much money is involved?
This is also decided on a case-by-case basis. Income (pension and asset depletion) are compared with the recognised expenditure (rent, old-age home costs, costs of illness or disability). Until now, only annual rents of up to CHF13,200 (for singles) and CHF15,000 (for couples) were chargeable. These sums have not increased since 2000, although rents have increased considerably, above all in cities. If the recognised expenses are higher than the chargeable income, as a rule an annual supplementary benefit will make up the difference.
Who pays for this?
The supplementary benefits are financed 100% by the state (government and cantons). Between 2000 and 2015, the expenses for supplementary benefits more than doubled. They now total around CHF5 billion a year. In 2033, the figure is expected to be CHF7.9 billion.
They are only for those who need it?
Because the cost of supplementary benefits increases every year, largely as a result of demographic development (the increasing number of pensioners), parliament is discussing reforms. Those on the political right want not only cuts to supplementary benefits but also higher hurdles to claiming them, bringing up examples of abuse.
The political left wants to guarantee the financing of supplementary benefits by taxes, pointing to the high cost of living in Switzerland. “A life with supplementary benefits is a life on the poverty line,” says Silvia Schenker from the leftwing Social Democratic Party.
What else is being debated?
The House of Representatives doesn’t want to grant any supplementary benefits if the claimant has assets of more than CHF100,000. What’s more, it wants to reduce the supplementary benefits claim by 10% if the capital drawn from the occupational pension is used up prematurely.
What is the reaction of the Swiss Abroad?
The House of Representatives has made its decision retroactive from March of this year, according to which supplementary benefits will only be available to people who have paid into the old-age pension scheme for at least ten years. This saving measure triggered protests from the Organisation of the Swiss Abroad, which said this would disadvantage anyone who had lived abroad.
(Source: Federal Social Insurance Office)
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