Council States Mixed Solution 13th AVS | Frontaliere Ticino

Council States Mixed Solution 13th AVS | Frontaliere Ticino

Council States Mixed Solution 13th AVS — 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 Council of States has reaffirmed its position in favour of a mixed solution to fund the 13th monthly AVS payment, a proposal aimed at ensuring the financial sustainability of Switzerland's social security system. The decision, made during the spring session of 2026, saw the Upper Chamber reiterate the need for a balanced approach involving both an increase in VAT and payroll contributions. The proposal, put forward as a compromise to the National Council, suggests a 0.3% increase in VAT until 2030, with the possibility of further increases based on economic performance. This increase is estimated to generate around 1.1 billion francs per year, according to the preparatory committee's rapporteur, Erich Ettlin (Centre/Ow). > "A 1% point increase in VAT generates around 3.7-4 billion francs," Ettlin emphasised, adding, "A 1% point increase in payroll contributions produces around 5 billion francs." This mixed approach, according to the Council of States, is considered more fair and equitable, distributing the tax burden more evenly among citizens and businesses. The decision was made after a heated debate, with a minority proposing to fund the 13th payment exclusively through VAT. Josef Dittli (FDP/UR), one of the supporters of this position, expressed concern about the negative impact a payroll contribution increase could have on purchasing power and economic competitiveness. > "An increase in payroll contributions is equivalent to a new tax on labour," Dittli stated, "and could damage our ability to attract investments and maintain our global competitiveness." However, the majority of the Council of States supported the mixed solution, emphasising the need to ensure the long-term sustainability of the AVS, which provides crucial support to the elderly in Switzer...

Operational details

The Council of States' decision to opt for a mixed solution to fund the 13th monthly AVS payment is in line with the recommendations of various experts and organisations. The Federal Office of Social Insurance (FOSI) has supported this proposal, emphasising the need for a balanced approach involving both employers and employees. > "An exclusive increase in VAT could be perceived as an excessive burden on consumers," stated a FOSI spokesperson. "The mixed solution, on the other hand, distributes the tax burden more fairly, ensuring that all citizens contribute proportionally to the sustainability of the AVS." The Swiss Trade Union Federation (STUF) has also expressed its support for the mixed solution, highlighting the importance of protecting workers' purchasing power. > "An increase in payroll contributions, if well-calibrated, can be managed without compromising economic competitiveness," declared STUF President Pierre-Yves Maillard. > "Our priority is to ensure that the AVS remains solid and sustainable," Maillard added. "The mixed solution is a reasonable compromise that protects workers and guarantees the financial stability of the social security system." The Council of States' proposal includes a 0.3% increase in VAT until 2030, with the possibility of further increases based on economic performance. This increase is estimated to generate around 1.1 billion francs per year, according to FOSI estimates. The increase in payroll contributions, on the other hand, would be more moderate, with an increase of around 0.1 percentage points. > "The increase in payroll contributions is calibrated to not overly burden employers," explained a FOSI expert. "This approach ensures that Swiss businesses remain competitive globally while contributing proportionally to the sus...

Key points

The Council of States' decision to opt for a mixed solution to fund the 13th monthly AVS payment is good news for cross-border workers who work in Switzerland and reside in Italy. With this decision, Switzerland's social security system remains solid and sustainable, ensuring the continuity of benefits for cross-border workers who contribute to the AVS. For cross-border workers, it is important to understand the implications of this decision and how it may impact their salary and social security contributions. Frontaliere Ticino's salary calculator is a useful tool to simulate the impact of this decision on one's income. For example, a cross-border worker earning 60,000 francs per year and contributing to the AVS would see an increase in their social security contributions of around 60 francs per year with the mixed solution. This increase is relatively modest and can be managed without significantly compromising purchasing power. It is also important to remember that the mixed solution helps distribute the tax burden more fairly, ensuring that all citizens, including cross-border workers, contribute proportionally to the sustainability of the AVS. This equitable approach protects current and future beneficiaries, ensuring that Switzerland's social security system remains solid and reliable. For more information and to stay up-to-date on the latest news regarding cross-border workers and Switzerland's social security system, visit the Frontaliere Ticino website. The source of this news is laRegione.ch, and the article's date is March 19, 2026.