Government proposes payroll hikes to stabilize disability insurance

Switzerland’s Federal Council has proposed higher payroll contributions and other measures to shore up the country’s disability insurance system, SRF reported on Wednesday. The package also aims to improve the employment prospects of young people with health problems.

Under the plan, people aged 18 to 24 could receive an integration payment of 1,000 francs. Doris Bianchi, director of the Federal Social Insurance Office, said the payment would not be a pension but tailored support to help people enter the labour market, taking their personal circumstances into account.

The government estimates the measure could prevent about one third of new disability pensions in this age group. It also wants to provide closer support to people over 25, particularly during transitions such as moving from education into work.

To cut spending, disability insurance offices would be expected to operate more efficiently. The threshold for receiving a full disability pension would also rise, and some daily allowances would be reduced.

On the revenue side, the government wants part of the casino levy to go to disability insurance and proposes raising payroll contributions by 0.2 percentage points. That increase would generate almost one billion francs in 2030, according to the report. Bianchi said spending cuts alone would not be enough to stabilize the system.

The package also includes temporary revenue measures. A solidarity contribution of 0.6 percentage points would apply to salaries above about 180,000 francs, split equally between employees and employers. The government estimates this would raise around half a billion francs a year. In addition, if contribution rates for the income compensation scheme fall, payroll contributions would temporarily be raised by the same 0.5 percentage points for disability insurance.

The employers’ association welcomed the proposed integration payment but called for structural measures. Its representative Barbara Zimmermann-Gerster said financing the system through payroll contributions would burden employers and employees, affect work incentives and harm Switzerland’s attractiveness as a business location. The consultation on the reform runs until early February.