Switzerland’s Federal Department of Home Affairs, in a release on 14 August 2024, clarified the consultation on the implementation and financing of the 13th AHV pension at its meeting on 14 August 2024. The consultation was held regarding securing additional funding for a “13th-month” pension payment under the old-age and survivors’ insurance programme (AHV).
This measure has been approved and will commence in 2026.
The 13th AHV pension will be paid from 2026, and its financing will be ensured sustainably from the start. The additional expenditure will amount to almost CHF 5 billion annually in 2030. VAT will be increased to ensure the balance of the AHV compensation fund until that date.
Initially, two options were considered: Increasing employee contributions or raising employee contributions and VAT. However, most participants in the consultation favoured the variant, combining an increase in employee contributions and VAT.
However, since the adjustment of the AHV financial outlook revealed a lower financing requirement than expected, the Federal Council considers it more appropriate to increase VAT only.
The 13th pension will be paid once a year, in December, to all recipients of an old-age pension. Approved by a clear majority of the participants in the consultation, this variant respects the will expressed by the people during the vote.
The Confederation currently contributes to the AHV, which is 20.2% of the insurance’s annual expenditure. Although most participants in the consultation opposed a reduction in this contribution, the Federal Council considers it appropriate to maintain this measure given the Confederation’s financial situation. The contribution will be reduced to 19.5%. Thus, in 2030, the Confederation will contribute around 500 million francs to financing the 13th pension.
The Federal Council will determine the exact level of this increase in autumn 2024 based on the new AHV financial perspectives. In autumn, it will also adopt the dispatch so that Parliament can begin the debates during the 2024 winter session.
