New, expensive reform ideas are emerging: this is how much social expansion is costing us

The largest item is pension provision: about 50 billion flowed to the AHV and almost 80 billion to the pension funds. More than 30 billion francs was owed for compulsory health insurance. Billions of francs will be added in the coming years. View shows the most important items.

The AHV is the heart of the welfare state because everyone benefits from it. It is dear to the population, as is evident from the clear yes to the 13th AHV pension. This alone will increase AHV expenditure by 4 to 5 billion francs annually from 2026.

The next expansion will soon be up for discussion. If the Center were to implement its initiative to abolish marriage penalty in the AHV and push it through the electorate, another Rs 3 billion would be due.

However, there are also cost-saving attempts. The Federal Council wants to abolish lifelong widow’s pensions and pay them only for a limited period. This means that the federal government and the AHV can save 1 billion francs. In addition, the Social Commission of the National Council wants to abolish child pensions for parents who have reached retirement age. This would save more than 200 million euros; the National Council will decide on the proposal on Thursday.

It is up to the voters whether social expansion will continue quickly: the SP’s premium exemption initiative will go to the polls on June 9. The intention is that health insurance premiums will be capped at a maximum of 10 percent of the relevant household income. Costs for the federal government and the cantons: 4.5 billion francs.

More about social expansion

Next pension battle

56 percent are against pension fund reform

Confrontation on June 9

Yes, head start for both health insurance initiatives

After yes to the 13th AHV pension

The next battle is already around the corner

Father of the 13th AHV pension

“No one should have to pay more than they do now”

The letter became a non-starter

Even Ogis Kandersteg says yes to the 13th AHV pension

All answers to vote

When will the 13th AHV pension be paid out for the first time?

Historic mood

People clearly accept the 13th AHV pension!

Private union boss

He pulls the strings everywhere

After yes to the 13th AHV pension

People with disabilities demand a 13th IV pension

A survey by Tamedia shows that currently 64 percent are in favor of the initiative, while only 21 percent are against it. If the request fails in the vote, Parliament’s indirect counter-proposal comes into play. Then the cantons only have to spend an additional 350 million euros for the premium reduction.

Things are happening in rapid succession: the next pension battle will end in the autumn with the reform of the pension fund. The key point is the reduction of the minimum conversion percentage in the BVG obligation from the current 6.8 percent to 6.0 percent. This would reduce pensions. Compensation measures are intended to prevent a pension gap as much as possible – although this is not possible everywhere.

The bottom line is that more money will flow into the second pillar, mainly through additional wage contributions from employees and employers: from 2025 this will be an average of 2.1 billion francs per year. It remains to be seen whether this will happen as unions are fighting the proposal with the referendum. A Sotomo poll shows that 56 percent of respondents reject the reform.

The 13th AHV pension makes it clear that additional sources of income are needed, at least in the medium term. In any case, there is a colorful bouquet of ideas about how social expansion can be financed.

• Wage percentages: Some social insurance schemes are already co-financed through wage rates. Logically, these are also the focus for additional financing. For example, one additional AHV wage percentage would yield more than 4 billion francs. There is also a degree of flexibility when it comes to wage contributions, as social contributions have fallen in other areas – for example due to fewer accidents in accident insurance. In addition, there are signs of a reduction in the financially healthy unemployment insurance. The saved salary percentages could be transferred to the AHV fund without this being noticeable in Büezer’s wallet.
• VAT: A higher VAT is also an option. An additional percentage point yields 3.5 to 4 billion francs
• Transaction tax: The Center has introduced a tax on financial market transactions. This may apply to stock exchange transactions or money transfers. The Ministry of Finance estimates the potential roughly at 5 billion francs.
• Inheritance tax: The EPP is bringing back its old demand for a national inheritance tax “on large inheritances”. A popular initiative rejected in 2015 would have raised more than 3 billion francs.
• Direct federal tax: An increase in direct federal tax would also be conceivable if the federal government had to inject additional money. At CHF 29 billion, this is already the Confederation’s main source of income.

And who knows, maybe a billion or two could be saved in other areas of the federal budget, which has now grown to R80 billion a year.