13th AVS Pension: Clash Over Funding. Will VAT and Contributions Rise? (cross-border guide)

Di Valerie Linc · Published on · Updated on

The Council of States' commission is pushing for a mixed funding model of 4.2 billion for the 13th AVS pension. An increase in VAT and salary contributions is on the table. What does this mean for your payslip?

Contesto

TL;DR - 13th AVS pension funding debate in Bern affects cross-border workers. - Council of States proposes mixed solution: VAT + salary contributions. - National Council approved temporary 0.7% VAT increase until 2030. - Final decision impacts net salary and cost of living in Switzerland. ## Key facts - Extra costs: 4.2 billion francs starting in 2026. - VAT increase: 0.7 percentage points, from 8.1% to 8.8%. - Current AVS/AI/IPG: 10.6% of gross salary, split equally. - Council of States: Proposes VAT increase + salary contribution increase. - National Council: Approved temporary 0.7% VAT increase until 2030. - Impact on workers: Lower net salary and higher cost of living. - First 13th pension: Scheduled for December 2026. - Source: RSI, September 13, 2024. The debate on funding the 13th AVS pension, approved by the people on March 3rd, is heating up in Bern, and the consequences will be directly felt on cross-border workers' payslips and the cost of living in Ticino. The Social Security and Health Commission of the Council of States has laid its cards on the table: to cover the extra costs, estimated at 4.2 billion francs starting in 2026, a mixed solution is needed. According to the 'senators', the VAT increase proposed by the Federal Council is not enough on its own. The commission's proposal is clear: combine an increase in salary contributions with an adjustment to the Value Added Tax. This comes as a cold shower for those hoping for a lighter impact. The position clashes head-on with that of the National Council, which in September approved a 0.7% VAT increase, but only temporarily until 2030. A solution that the Council of States' commission deemed a mere postponement of the problem. > For the commission, a temporary VAT increase offers no long-term perspecti...

Dettagli operativi

Let's delve into the technical details to understand what's at stake. The options on the table have very different implications for a cross-border worker's wallet. ## The Two Paths to Funding Currently, AVS/AI/IPG contributions amount to 10.6% of the gross salary, split equally between employer and employee (5.3% each). The Council of States' commission's proposal aims to increase this rate. Even a small adjustment, for example of 0.1% or 0.2% for the employee, would result in a direct reduction of the monthly net salary. The other lever is VAT. The Federal Council and, in part, the National Council are aiming for an increase of 0.7 percentage points. This would bring the standard rate from the current 8.1% to 8.8%. Although cross-border workers do not live in Switzerland, this increase would have an impact on: - Meals: the cost of lunch or a coffee would increase. - Shopping: any goods bought in Ticino, from gasoline to groceries at Foxtown in Mendrisio, would be subject to the price hike. - Services: fees for professionals, repairs, and other services would become more expensive. 📊 Scenario Comparison - Federal Council/National Council Proposal: 0.7 point VAT increase. Indirect impact on the cost of living in Switzerland. - Council of States Commission Proposal: VAT increase + Salary contribution increase. Direct impact on the payslip AND indirect impact on the cost of living. The Council of States' commission considers its solution more 'sustainable'. The logic is that relying solely on VAT, a tax linked to consumption, is risky and does not guarantee stable long-term revenue. Dividing the burden between consumption (VAT) and labor income (contributions) appears, in their view, fairer and structurally more solid. The discussion will now return to the parliament...

Punti chiave

What does all this mean in practice for a cross-border worker employed in Lugano or Bellinzona? The certainty is that the 13th AVS pension will have a cost, and that cost will be borne by workers and consumers. The ongoing political battle in Bern will only decide how the bill is split. ## How to Prepare? No immediate action is necessary at the moment, but it is crucial to be aware of possible developments. A combined increase in contributions and VAT will reduce disposable net income, a factor to consider in managing the family budget and long-term financial planning. 💡 Practical Tips: - Monitor decisions: Follow the parliamentary process to understand which funding model will prevail. - Re-evaluate your budget: Start considering how a potential decrease in net income or an increase in costs in Switzerland could impact your finances. - Pension planning: The introduction of the 13th AVS, despite its cost, changes the pension landscape. It's an excellent opportunity to review your overall retirement strategy, including the second and third pillars. Understanding how these reforms will affect your future pension is crucial. Changes in contributions and final benefits can significantly alter retirement plans. To get a clear picture of your personal situation, using simulation tools can be helpful. Our pension planner, for example, allows you to calculate your future AVS and second pillar pension, helping you make informed decisions for your future. (Source: RSI, September 13, 2024)

Punti chiave

[{"q":"What will be the impact on the net salary of cross-border commuters if the increase in AHV contributions is approved?","a":"An increase in AHV contributions, even by 0.1% or 0.2% payable by the worker, will result in a direct reduction in the monthly net salary."},{"q":"How much will the costs for a cross-border commuter increase for purchases in Switzerland increase with the proposed VAT increase?","a":"The increase in VAT of 0.7% will lead to an increase in the cost of purchases in Switzerland. For example, a purchase of 100 CHF would cost 7 CHF more (8.1% to 8.8% VAT), bringing the total to 108.8 CHF."},{"q":"What changes for the thirteenth AHV for cross-border commuters with the increase in contributions proposed by the Committee of States?","a":"The increase in AHV/IV/EO wage contributions, currently at 10.6% of gross, could rise by 0.1 to 0.2 percentage points to be borne by the employee. This would reduce the monthly net salary, with a direct impact on the paycheck as early as 2026."},{"q":"How does the increase in VAT affect health services for cross-border commuters in Ticino?","a":"Ordinary VAT would go from 8.1% to 8.8% (+0.7 points). This increase would also apply to private doctors' visits, pharmacies and supplementary health insurance, increasing the cost of access to healthcare services in Switzerland."},{"q":"What are the differences between the financing of the thirteenth AHV proposed by the National Council and the Committee of States?","a":"The National Council is proposing a temporary VAT increase (+0.7% until 2030), while the Committee of States wants a combined increase in VAT and wage contributions for structural and sustainable financing without deadlines."}]

Frequently Asked Questions
What will be the impact on the net salary of cross-border commuters if the increase in AHV contributions is approved?
An increase in AHV contributions, even by 0.1% or 0.2% payable by the worker, will result in a direct reduction in the monthly net salary.
How much will the costs for a cross-border commuter increase for purchases in Switzerland increase with the proposed VAT increase?
The increase in VAT of 0.7% will lead to an increase in the cost of purchases in Switzerland. For example, a purchase of 100 CHF would cost 7 CHF more (8.1% to 8.8% VAT), bringing the total to 108.8 CHF.
What changes for the thirteenth AHV for cross-border commuters with the increase in contributions proposed by the Committee of States?
The increase in AHV/IV/EO wage contributions, currently at 10.6% of gross, could rise by 0.1 to 0.2 percentage points to be borne by the employee. This would reduce the monthly net salary, with a direct impact on the paycheck as early as 2026.
How does the increase in VAT affect health services for cross-border commuters in Ticino?
Ordinary VAT would go from 8.1% to 8.8% (+0.7 points). This increase would also apply to private doctors' visits, pharmacies and supplementary health insurance, increasing the cost of access to healthcare services in Switzerland.
What are the differences between the financing of the thirteenth AHV proposed by the National Council and the Committee of States?
The National Council is proposing a temporary VAT increase (+0.7% until 2030), while the Committee of States wants a combined increase in VAT and wage contributions for structural and sustainable financing without deadlines.

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