EU reform, cost for Switzerland: one billion (cross-border guide)

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:

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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:

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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.

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