13th AVS Pension Financing Impact Salary Cross Border Workers Ticino | Frontaliere Ticino
13th AVS Pension Financing Impact Salary Cross Border Workers Ticino — free tools and expert guides for cross-border workers (frontalieri) between Switzerland and Italy. Compare salaries, tax, LAMal health insurance, pensions, and cost of living in Ticino. Updated 2026.
Context
The financing of the 13th AVS pension, approved by the people last March 3rd, is now at the heart of the political debate and threatens to have a direct impact on the payslips of thousands of cross-border workers in Ticino. The Social Security and Health Commission of the Council of States has broken the deadlock, proposing a mixed financing solution that sharply diverges from the Federal Council's line. The proposal on the table involves a combination of two measures: an increase in salary contributions and an upward adjustment of the Value Added Tax (VAT). This stance clashes with the government's vision, which aimed solely for a VAT increase of 0.7 percentage points. The National Council also took a different path in September, accepting a VAT increase but only on a temporary basis until 2030. For the Council of States' commission, this solution is not viable. As stated by the Parliament's services, "a temporary VAT increase offers no long-term perspective and would postpone the financing need." The goal is instead to find rapid and, above all, sustainable coverage for the additional costs, estimated at around 4.2 billion francs per year starting from 2026, the year the first 13th pension payment is due. The ball is now in the court of the two Chambers, which will have to find a compromise. But for the workers who cross the border at Chiasso, Gaggiolo, or Ponte Tresa every day, the signal is clear: the cost of the new pension will also weigh on their finances in one form or another.
Operational details
For a cross-border worker, the distinction between an increase in contributions and a VAT hike is not a technical detail, but an issue that directly affects their wallet. Let's look at the two hypotheses and their consequences in detail. ## The direct impact on the payslip An increase in AVS/AI/IPG salary contributions is the measure that would have the most immediate and visible effect. Currently, the deduction for the first pillar amounts to 10.6% of the gross salary, split equally between the employer and the employee (5.3% each). Any adjustment to this rate, even by a few tenths of a percentage point, would result in a lower net amount on the payslip every single month. Although the exact percentage of the increase has not yet been defined, it would certainly erode the worker's disposable income. This measure, while ensuring solid and wage-linked financing, represents a direct and non-optional cost for anyone earning a salary in Switzerland. ## The VAT increase: an indirect cost The second lever is the VAT increase, with the figure of 0.7% still being discussed. For a cross-border worker residing in Italy, the impact is less direct but not negligible. Any purchase of goods or services made in Switzerland would become more expensive. This affects daily expenses like lunch, coffee, fuel for those who refuel in Ticino, or larger purchases at shopping centers like Foxtown in Mendrisio. Although the main spending occurs in Italy, this price increase would reduce the purchasing power of the Swiss franc within the Confederation. The mixed solution would therefore distribute the burden between a certain reduction in net salary and an increase in costs for those who consume in Switzerland.
Key points
The political game in Bern is still far from over. The tug-of-war between the two Chambers and the Federal Council will still require time before a final decision is reached. What is certain is that the financing of the 13th AVS pension, which will be paid out for the first time in December 2026, will entail costs that will be shared among the community, including cross-border workers. ## What to do now? For cross-border workers, this is the time to plan and not be caught unprepared. Even if the precise rates are not yet known, the direction is clear: the cost of labor in Switzerland is set to increase slightly to finance a more generous pension benefit. It's a classic trade-off: a small sacrifice today for a potentially greater benefit tomorrow, in the form of a more substantial old-age pension. 💡 Practical advice: While waiting for official figures, it is wise to start familiarizing yourself with your payslip and understanding how the different deductions affect your net income. Simulating future scenarios can help you become aware of the real impact. To understand how a change in social contributions could alter your net salary, it is essential to use simulation tools. Our net salary calculator can help you visualize the impact of different rates on your monthly income, thus preparing you for Bern's future decisions. (Source: RSI, 13.09.2024)