Pensions to increase in Switzerland from July: What you need to know
The Swiss government has confirmed that pensions in Switzerland will rise from July 2023 at the earliest, in response to the higher cost of living. It amounts to the second major adjustment to social security in 2023. Here’s what you need to know.
Update: At a vote on March 2, the Swiss Parliament rejected the plan to raise pensions. A compromise deal is now being discussed.
Initial increase in Swiss pensions not enough says government
In a statement released on February 22, the Federal Council said recent pension rises - first pillar pension payments were increased by 2,5 percent in January 2023 - have not been enough to keep up with inflation, which has reached 2,8 percent this year already. Therefore, the council has drafted a plan that would see pension rates rise again.
Typically, the government only adjusts pensions every two years so that they fall roughly in line with the cost of living and increases in salaries. However, the recent spike in inflation has forced the council to act faster to make sure old-age pensioners are not left out of pocket, especially given that people in Switzerland have suffered the biggest loss in purchasing power since World War Two.
Pensions in Switzerland to be raised from summer 2023
From the summer, the government has decided to increase first (OASI) pillar pension payments by 0,3 percentage points, on top of the 2,5 percent rise already in place since January. In practice, this means that the minimum OASI pension will be raised to 1.232 francs a month, while the maximum will rise to 2.464 Swiss francs a month. According to government figures, the new policy will cost federal and cantonal governments 209 million francs a year.
As the call for higher pensions was originally made by the National Council, the Federal Council said it expected the pension increase to pass parliament with ease. Authorities confirmed that if all goes well, pensioners will see the extra money in their bank accounts from July 1, 2023. For more information, check out the official press release.
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