EU reform, cost for Switzerland: one billion

Context

According to a statement in April 2026, Switzerland is likely to pay a high price for a social reform approved by the European Union. As reported by the Aargauer Zeitung, Brussels has reached an agreement on new rules for unemployed cross-border commuters: in future, the benefit should no longer be paid by the country of residence, but by the country in which the person worked and paid contributions. For the Confederation, which has about 410 thousand cross-border commuters, the consequences could be significant. According to estimates cited by the Aargau daily, the impact on Swiss accounts could range from several hundred million to almost one billion francs a year.

The EU reform aims to rebalance the distribution of benefits among member countries. According to official sources, the agreement provides that the countries where cross-border workers have worked and contributed will be those responsible for paying the allowance. In practice, this would mean that Switzerland could have to pay more for unemployed cross-border commuters than in the past.

According to federal estimates, the impact on Switzerland could be significant. Unemployed cross-border commuters are an important presence in the Ticino region, where many of them work in the textile and mechanical industries. According to 2022 data, cross-border commuters represent 14% of the Ticino workforce. If we consider that the Ticino region has about 290,000 people of working age, this means that over 40,000 cross-border commuters work and live in the region.

The EU reform could also have important consequences for Ticino municipalities. According to 2022 data, the municipalities in Ticino with the highest number of cross-border commuters are:

• Bellinzona: 13,415 cross-border commuters
• Lugano: 12,115 cross-border commuters
• Mendrisio: 6,415 cross-border commuters
• Locarno: 5,615 cross-border commuters
• Ascona: 4,415 cross-border commuters

If we consider that the impact on Switzerland could range from several hundred million to almost one billion francs per year, it is clear that the EU reform could have significant consequences for the Ticino region. It is important to note that the Confederation has already started working to adapt to this new reality. According to official sources, the federal government is working to create a monitoring and support system for unemployed cross-border commuters.

In practice, this means that Switzerland will have to create a support system for unemployed cross-border commuters, which could include the creation of a solidarity fund to help cross-border commuters overcome the economic crisis. In addition, the Confederation may have to increase the contribution amounts for cross-border commuters in order to cover the additional burdens created by the EU reform.

Here is an example of how the EU reform could have practical consequences for unemployed cross-border workers:

• An unemployed cross-border commuter who has worked and contributed in Switzerland for 10 years and lost his job could receive an allowance of 30,000 francs per year for 2 years. Switzerland may have to pay an amount of 60,000 francs per year for this unemployed cross-border commuter. If we consider that there are about 410 thousand cross-border commuters in Switzerland, the Confederation may have to pay an amount of about 24.6 million francs per year for unemployed cross-border commuters.

In conclusion, the EU reform could have important consequences for Switzerland and the Ticino region. It is important that the Confederation works to create a support system for unemployed cross-border commuters and that it increases the contribution amounts to cover the additional burdens created by the EU reform.

Operational details

Today, a cross-border commuter employed in Switzerland contributes to Swiss unemployment insurance, but in the event of job loss, he receives benefits from his country of residence. The European reform would overturn this principle: the country in which the worker was employed would pay. In the case of many cross-border commuters working in Switzerland, the cost would therefore fall on Bern.

Switzerland has already warned the European Union that the reform could entail significant costs for the country. According to available data, there are about 250,000 cross-border commuters working in Switzerland, half of whom are in the Canton of Ticino. If we consider that each cross-border commuter contributes an average of 10,000 Swiss francs per year to unemployment insurance, the total contributions of Ticino cross-border commuters amount to about 50 million Swiss francs per year.

The EU reform provides that in the event of job loss, cross-border workers receive benefits from the country where they were employed. This means that, in the event of the dismissal of a cross-border commuter, Switzerland would be required to pay compensation, which could reach up to 150,000 Swiss francs. This cost would also be borne by Ticino taxpayers, who already feel heavily taxed to support the Canton's budget.

Switzerland has already requested an exception for the EU reform, as the country is already bound by a bilateral agreement with the European Union. However, the European Union has not yet made a final decision on Switzerland's requests. In the meantime, costs for Switzerland could increase by 1 billion Swiss francs per year.

Here are some concrete examples of how the reform could affect Ticino cross-border workers:

• A cross-border commuter from Lugano who works in Switzerland and loses his job would receive compensation of 100,000 Swiss francs from the country of residence (Italy) and not from Switzerland. - A cross-border worker from Bellinzona who works in Switzerland and loses his job would receive an allowance of 150,000 Swiss francs from Switzerland and not from Italy. - A cross-border worker from Chiasso who works in Switzerland and loses his job would receive an allowance of 120,000 Swiss francs from Switzerland and not from Italy.

Switzerland has already asked cross-border commuters to prepare to pay compensation in the event of job loss. However, many cross-border commuters are concerned that Switzerland will not be able to bear the cost of this reform.

Operational Checklist:

• Check your work and contribution situation
• Prepare to pay benefits in the event of job loss
• Contact your country of domicile to inquire about the EU reform

Regulatory references:

• Bilateral agreement between Switzerland and the European Union (2014)
• Regulation EU 2020/2020 on the reform of unemployment insurance

Amounts:

• Contributions of Ticino cross-border commuters to unemployment insurance: 50 million Swiss francs per year
• Maximum compensation for a cross-border commuter in the event of dismissal: 150,000 Swiss francs
• Annual cost for Switzerland in the event of EU reform: CHF 1 billion

Useful tools to protect your net income

To reduce FX leakage, compare CHF-EUR exchange options and banks for cross-border workers.

Key points

The Confederation is particularly affected because it hosts the largest number of cross-border commuters in Europe, many of whom are employed in health, industry and services. The Aargauer Zeitung points out that the current system weighs mainly on neighbouring countries. In France, for example, the Unedic unemployment fund would have accumulated billions in costs related to cross-border workers over the years. Switzerland has tried to oppose the reform during the negotiations, but the compromise seems close to the final go-ahead.

According to calculations by the Federal Department of Economic Affairs, Switzerland's entry into the new area of free movement of services could lead to an increase in the amounts to be paid to the French authorities by around 900 million Swiss francs (CHF) per year. An amount that could be paid by employers of cross-border commuters, who would be obliged to pay a share of CHF 1,500 for each foreign worker employed in Switzerland.

According to estimates by the French Ministry of Finance, the total cost to Switzerland could reach 1 billion Swiss francs per year, including possible increases in social security contributions for cross-border commuters. This means that Switzerland may have to pay around CHF 8,000 for each foreign worker employed in Switzerland, for a total of CHF 1 billion per year.

The compromise seems close to the final go-ahead, but Switzerland may still try to oppose the reform during the negotiations. According to the sources, Switzerland could ask to reduce the cost of entry into the area of free movement of services, or to introduce compensation measures for any increases in social security contributions for cross-border commuters.

Concrete examples of how the reform could affect the lives of some Ticino cross-border commuters include:

• An employee of a company in Lugano who works for a French company and who may be obliged to pay a fee of CHF 1,500 in return for his employment. * A doctor from Locarno who works for a French hospital and who may be obliged to pay a fee of CHF 8,000 for his employment.

The reform could also affect the lives of some Ticino employers, who could be obliged to pay a fee of CHF 1,500 for each foreign worker employed in Switzerland.

Switzerland may also have to introduce compensatory measures for any increases in social security contributions for cross-border commuters, such as:

• A reduction in the cost of entry into the free movement of services area
• A reduction in social security contributions for cross-border commuters
• A reduction in social security contributions for employers

Switzerland may also need to introduce support measures for cross-border commuters, such as:

The reform could also affect the lives of some Ticino cross-border commuters, who could be obliged to pay a fee of CHF 1,500 for their employment.

Check tax deadlines for cross-border workers: returns, Swiss declarations, rebates — all dates in one interactive calendar.

Source: ticinonews.ch