Social insurance at the heart of the debates under the Federal Dome

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Keystone

Abolition of children’s pensions, export of extraordinary disability pensions or even the right to family reunification: parliamentarians will debate several subjects that closely affect the Swiss abroad during the summer session, which is being held in Bern from May 27 to June 14.

This content was published on

May 27, 2024 – 09:38

The political battle to finance the 13^e Old Age and Survivors Insurance (AVS) pension, accepted in federal votes on March 3, is in full swing.

The Democratic Union of the Center (UDC/conservative right) is determined to limit pension system spending in other areas. The country’s leading party is thus specifically attacking pensions paid to retirees (mainly men) with minor children or children in training and residing abroad.

During the summer session, the National Council will decide on two motionsExternal link of the UDC deputy Andreas Glarner, who propose to denounce and renegotiate social security conventions concluded with several countries to exclude the payment of pensions for children. Thailand, the Philippines, Turkey, Brazil, the Dominican Republic, as well as the states of the former Yugoslavia are concerned.

Children’s pensions are already on hold, since the National Council (Lower House) decided to abolish them altogether during the spring session. A decision which must still be confirmed by the Council of States (Upper House).

In total, these allowances cost the Confederation some 230 million francs per year, which represents only a small part of the sums paid by the AVS (nearly 50 billion francs in total). However, in recent decades, the number of beneficiaries has increased significantly, particularly outside Switzerland’s borders. Today, around 32,000 people receive this aid, a third of whom live abroad.

Andreas Glarner believes that this situation often leads to abuse. “This regulation allows certain expatriates to finance their life abroad. Beneficiaries residing abroad thus recognize children there as theirs to obtain allowances,” he says.

The government, however, recommends to the National Council to reject the text of the elected UDC. He recalls that the conditions giving entitlement to a pension are already subject to detailed and rigorous examination to prevent abuse. Furthermore, in the eyes of the Federal Council, it would be disproportionate to denounce the conventions and this would not achieve the objective of the motions.

>> The abolition of children’s pensions would have an impact on the diaspora:

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What the abolition of children’s pensions would mean for the Fifth Switzerland

This content was published on

Mar 08, 2024

The National Council has spoken out in favor of abolishing children’s pensions. A measure that would also affect retired Swiss abroad.

read more What the abolition of children’s pensions would mean for the Fifth Switzerland

People who receive a Swiss pension are also the subject of a motionExternal link which will be discussed in the Council of States. Centrist senator Beat Rieder asks the Federal Council to increase AVS pensions for those in need. The text was, however, tabled before the people’s vote in favor of a 13^e retirement pension and should therefore be quickly buried.

Obstacle to mobility or safeguard?

The National Council will also debate extraordinary disability pensionsExternal link. These are paid to people who have suffered from a disability since birth or before the age of 20. The latter have not been able to contribute to Disability Insurance (AI) for three years, the minimum required to be entitled to an ordinary pension, but can receive an extraordinary pension in the form of a fixed amount.

However, the law prohibits the payment of these annuities abroad. People who benefit from it are in principle forced to remain domiciled in Switzerland if they want to continue to receive a sum on which they often depend to live.

Socialist MP Barbara Gysi considers the situation unfair. “This can give rise to dramatic cases, for example when Swiss citizens receiving an extraordinary disability pension wish to settle in another country, but can only do so if they continue to receive their pension” , she wrote in a motion. Its text asks the government to allow the export of extraordinary disability pensions.

The Organization of the Swiss Abroad (OSE) supports the motion, believing that the current situation constitutes an obstacle to international mobility which must be eliminated. However, the Federal Council is opposed to it. Without the ban on the export of these services, he believes, among other things, that people could be tempted to enter Switzerland for the sole purpose of obtaining an annuity.

Swiss people discriminated against at home

The deputies will also speak out on discrimination against the Swiss in their own country, which we have already mentioned here.

Swiss citizens abroad who decide to return to the country with members of their family do not benefit from the same rights as citizens of the European Union and EFTA (European Free Trade Association) countries in terms of family reunion.

This means, for example, that an EU citizen domiciled in Switzerland and married to a third-country national can bring her in-laws to Switzerland. However, this right is not granted to a Swiss woman in the same situation.

A parliamentary initiativeExternal link of the former socialist deputy Angelo Barrile wants to put an end to this difference in treatment. The government is in favor of it, as is the OSE.

Tax issues

The Council of States must still approve an amendment to the convention with France against double taxation, already accepted by the National Council.

This is very important, since it mainly makes it possible to regulate the terms of taxation of teleworking for cross-border workers. In accordance with an agreement between Bern and Paris, cross-border workers are expected to pay withholding tax in Switzerland on their entire salary, provided that they do not perform more than 40% of their annual work in telework. Senators should also give their approval to a convention between Switzerland and Slovenia, aimed at avoiding double taxation. The project has already passed the National Council and satisfied economic circles.