Social security

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© Keystone / Gaetan Bally

Switzerland has a social security network that covers risks in many areas – work, health, family and old age.

The Swiss social security system cannot be easily compared with that found in other countries, as it comprises a variety of insurance schemes with very different mechanisms. Its funding is characterised by a relatively low use of tax revenues, a focus on individual pension plans, and the influence of private institutions.

Moreover, the Swiss federal system and direct democracy shape social policy, generally slowing down the introduction of certain types of assistance, but sometimes also speeding up processes. For instance, disability insurance was introduced in 1960 following several popular initiatives calling for such a scheme, whereas maternity leave was put in place only in 2005, having previously been rejected by voters.

By international standards, Swiss social spending as a percentage of GDP is close to the European Union average.

Old-age allowance

The Swiss pension system is founded on three tiers or “pillars”: a compulsory state pension plan (old-age and survivor’s insurance), occupational pension schemes, and private pension plans.

The amount of pension a person receives under the compulsory state plan depends on how many years they have contributed and their level of income. The aim is to ensure that retirees can maintain a minimum standard of living. Anyone who is struggling financially can apply for additional state-funded benefits.

Disability insurance

This is a compulsory insurance, funded by contributions from employees, employers and the state through various taxes.

Benefits are paid to policyholders who cannot pursue gainful employment because of a physical or mental disability. This insurance also covers rehabilitation programmes, which help people to rejoin the workforce, as well as a full or partial pension.

Compensation for loss of earnings

This insurance is also compulsory, with contributions split between the employer and the employee. It partially makes up for loss of earnings arising from the performance of military, alternative civilian or civil protection service, or during maternity or paternity leave.

Since 2005, women have been entitled to 14 weeks of leave after the birth of their child, paid at 80% of their salary. Since 2021, men have been entitled to two weeks of leave after the birth of their child, paid at 80% of their salary.

Since 2021, parents who have to interrupt or reduce their work activity in order to care for a seriously sick or injured child are entitled to 14 weeks’ leave, paid at 80% of their salary.

Unemployment insurance

All workers in Switzerland who have not yet reached retirement age are insured against unemployment. Contributions are split between the employer and the employee. To receive payments, the unemployed person must:

– have been employed for at least 12 months within the two years prior to requesting benefits

– have Swiss residency and a work permit

– be registered with the regional unemployment office

– be actively looking for a job.

Unemployment benefits typically amount to about 70% of the person’s average wage over the last six months to a year. Insured persons with children may receive 80% of their average salary. Benefits are generally paid during a period of two years, although there are many exceptions.

Unemployed people who have reached the end of their entitlement period can receive transitional benefits from the age of 60, to ensure that they can maintain a decent standard of living until retirement.

Health insurance

Basic health insurance is compulsory for everyone residing in Switzerland. It is funded directly by the policyholders, who pay a fixed monthly premium to a private insurer. Anyone who has difficulty paying can apply for financial support (in the form of a subsidy) from the canton where they live.

Basic health insurance covers most health conditions, including doctor’s visits, childbirth and serious illnesses. Most prescription drugs are also included in the coverage.

Accident insurance

Employees are automatically insured by their employer against occupational accidents and diseases. If they work more than eight hours a week for the same employer, they are also insured against non-work-related accidents.

Stay-at-home partners, children, students and retirees must take out accident insurance with their basic health insurance. The self-employed are not legally required to do so.

Family allowances

The family allowance system can vary from one canton to another. In general, it is financed by employers, the self-employed and the cantons.

The purpose of family allowances is to partially offset the cost of raising one or more children. Employed and self-employed people can apply for an allowance for each of their children up to their 16th birthday. They can also obtain an allowance for any child who is still studying, up to the age of 25.

Some cantons have also introduced a birth or adoption allowance.

Social welfare

People who are struggling financially and whose social insurance benefits are insufficient, or who have not been able to receive them or are no longer entitled to them, may apply for social welfare. Its purpose is to guarantee a minimum standard of living for everyone.

Social welfare is generally funded by municipal and cantonal taxes. It is regulated by the cantons and implemented mainly by the municipalities. The way it works and the amounts provided can therefore vary greatly depending on where you live.

People in need of financial support should contact their regional social service office. Assistance is allocated on a case-by-case basis according to the person’s situation and needs. Welfare benefits are often paid to elderly people whose pensions are too low and single-parent families. Other eligible recipients include unemployed people who are no longer entitled to unemployment benefits and have not managed to find a job, people who are highly indebted, and workers who are not earning enough money to support members of their household.

About 10% of the population living in Switzerland receives some form of social assistance in the broadest sense of the term: additional benefits to supplement their old-age pension, family allowances, housing subsidies, advances on alimony payments, and general economic support for daily life.

Gaps in the system

Despite the different social security schemes in place in Switzerland, many people still fall through the cracks and can find themselves in a precarious situation. About one-third of those entitled to social benefits do not request assistance.

The system is complex and many people are unaware of their rights. It can be difficult to obtain information and the relevant services are not always readily available. Many people feel guilty about seeking support and fear stigmatisation. Some cantons also require people to pay back part of the assistance granted once their situation has improved.

Foreigners are also in danger of losing their residence permit if they become dependent on social welfare. Undocumented migrants and those in an irregular situation do not want to risk being arrested or deported by the authorities.

All these factors have led to an increase in the number of people in a precarious situation in Switzerland in recent years: in 2020, 8.5% of the population was living in poverty, despite receiving social security benefits.