Despite frequent and heated arguments to the contrary, new data released by the State Secretariat for Economic Affairs (SECO) has revealed that expats and internationals contribute more to the social security system in Switzerland than they take out. In addition, the government found that expats also have a positive effect on the cost of health insurance.
Expat contributions to the Swiss AHV system spark heated debate
The data was requested by the Neue Zürcher Zeitung (NZZ) in an attempt to see whether the arguments made by some political figures - that immigrants take more from the country than they put in - are justified. The newspaper noted that since the introduction of the free movement of people, which has allowed European Union citizens to claim Swiss residence permits far more easily, debates over whether new arrivals hurt or harm the social security system have become more heated.
To find out more, the NZZ asked SECO to detail how much EU and EFTA nationals contribute to the AHV system and how much they “take out” of the system in the form of benefits. Interestingly, despite some claiming that immigrants take more than they put in, the data told a different story.
Expats in Switzerland a net contributor to social security
In 2019, EU and EFTA nationals living in Switzerland contributed 27,1 percent of the funding for all AHV schemes, while only receiving 15,2 percent of total benefits. In 2020, expats paid 26,5 percent of all AHV contributions, yet only received 14,9 percent of all benefits.
The amount that expats benefited from each system depended on its function. For example, SECO noted that expats do not receive as much disability insurance as Swiss citizens, and usually pay more into the pension system than they receive in the short term. Authorities added that most expats are of working age and are healthy, meaning they are one of the most substantial net investors in basic and supplemental health insurance.
Expats claim more unemployment benefits that Swiss citizens
On the flip side, the government found that expats claim more unemployment benefits, contributing 25,5 percent of the scheme’s budget while receiving 32,8 percent of benefits in 2020. This was also true for emergency benefits and welfare. In 2020 2,1 percent of Swiss citizens were claiming from the scheme, compared to 6,2 percent of EU and EFTA residents and 12,1 percent of “third country” residents.
In concluding the report, the NZZ said that expats and internationals have a particularly strong and positive impact on the social security system, particularly in helping solve the pension crisis in the short term. However, they warned that the long-term benefits of expats will depend on what jobs they take, how much they earn and how long they remain in the alpine nation.