13th AVS pension: a lower salary for cross-border workers? (cross-border guide)

Di Valerie Linc · Published on · Updated on

The Council of States' commission is pushing for a mixed financing model: an increase in salary contributions and VAT. Cost of 4.2 billion. Here's the impact on your payslip.

Contesto

TL;DR - 13th AVS pension financing debated, impacting cross-border workers in Ticino. - Proposed mixed financing: salary contributions + VAT increase. - Costs estimated at 4.2 billion francs/year starting 2026. - Cross-border workers face direct or indirect financial impact. ## Key facts - Cosa: Financing of the 13th AVS pension - Quando: First payment due in December 2026 - Dove: Ticino, Switzerland - Chi: Cross-border workers in Ticino - Importo: 4.2 billion francs per year starting 2026 - VAT increase: 0.7 percentage points - Salary contributions: Current rate is 10.6% of gross salary 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...

Dettagli operativi

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.

Punti chiave

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)

Punti chiave

[{"q":"How would the thirteenth AHV pension be financed for Switzerland-Italy cross-border commuters?","a":"The Social Security Commission proposes mixed financing: an increase in AHV salary contributions (direct impact on paychecks) and a change in VAT (indirect cost for purchases in Switzerland)."},{"q":"What will be the impact of the VAT increase on the purchasing power of cross-border commuters residing in Italy?","a":"The increase in VAT (0.7% proposed) will make purchases made in Switzerland more expensive, reducing the purchasing power of the Swiss franc for cross-border commuters, especially for everyday expenses such as lunch, petrol or purchases at Swiss shopping centres."},{"q":"What changes for cross-border commuters if the increase in AHV/IV/EO contributions is approved?","a":"A possible increase in contributions (currently at 10.6% of gross salary) would directly reduce the net payroll. For example, an increase of 0.1 percentage points for the employee (5.3% currently) would result in an additional deduction of around 20 to 30 francs per month on a gross salary of 5,000 francs."},{"q":"How can I calculate the impact of a possible increase in contributions on my paycheck?","a":"You can use the net salary calculator on the website of the Federal Social Insurance Office (FSIO) or tools such as the one offered by RSI. Simply enter your gross salary and simulate the increase in rates to see the change in the monthly net."},{"q":"What are the goods and services in Ticino that will be increased due to higher VAT?","a":"The increase in VAT of 0.7% (or more) will make daily purchases such as coffee, restaurant meals, petrol and goods in Ticino shopping centres more expensive. For example, a 3.50-franc coffee would cost around 3.52 francs, with minimal but widesprea...

Frequently Asked Questions
How would the thirteenth AHV pension be financed for Switzerland-Italy cross-border commuters?
The Social Security Commission proposes mixed financing: an increase in AHV salary contributions (direct impact on paychecks) and a change in VAT (indirect cost for purchases in Switzerland).
What will be the impact of the VAT increase on the purchasing power of cross-border commuters residing in Italy?
The increase in VAT (0.7% proposed) will make purchases made in Switzerland more expensive, reducing the purchasing power of the Swiss franc for cross-border commuters, especially for everyday expenses such as lunch, petrol or purchases at Swiss shopping centres.
What changes for cross-border commuters if the increase in AHV/IV/EO contributions is approved?
A possible increase in contributions (currently at 10.6% of gross salary) would directly reduce the net payroll. For example, an increase of 0.1 percentage points for the employee (5.3% currently) would result in an additional deduction of around 20 to 30 francs per month on a gross salary of 5,000 francs.
How can I calculate the impact of a possible increase in contributions on my paycheck?
You can use the net salary calculator on the website of the Federal Social Insurance Office (FSIO) or tools such as the one offered by RSI. Simply enter your gross salary and simulate the increase in rates to see the change in the monthly net.
What are the goods and services in Ticino that will be increased due to higher VAT?
The increase in VAT of 0.7% (or more) will make daily purchases such as coffee, restaurant meals, petrol and goods in Ticino shopping centres more expensive. For example, a 3.50-franc coffee would cost around 3.52 francs, with minimal but widespread impact.

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