Unemployed frontier workers: the 900 million Swiss allowance (cross-border guide)

Context

In a nutshell

• The EU Parliament has approved the reform on the unemployment of frontier workers.
• Switzerland could suffer an aggravation of 900 million francs.
• The reform will introduce new provisions for long-term care benefits and family allowances.

Key facts

• What: reform on frontier workers' unemployment.
• When: approved by the EU Parliament.
• Duty: Switzerland could suffer an aggravation of 900 million francs.
• Who: the EU Parliament.
• Amount: 900 million francs.

The European Parliament has given its favourable opinion on the reform aimed at radically redefining the competences relating to the management and support of frontier workers who have remained unemployed. The vote in Strasbourg marks a turning point that risks being heavily reflected on the coffers of the Confederation: for Switzerland, in fact, this legislative change could result in additional costs estimated at several hundred million francs per year.

SECO's position is clear: “Switzerland's explicit agreement is necessary”. According to experts from the Secretariat of State for Economic Affairs (SECO), it is essential that Switzerland reaches an explicit agreement with the European Union to avoid an increase in costs.

Based on the fundamental principles of the European Union, each of the 27 Member States retains the right to decide on the structure of its own social security system.

Scenarios

Operational details

Unemployed frontier workers: the 900 million Swiss allowance The reform of the legislation on long-term care and family allowances could have a significant impact on Switzerland, with a burden of 900 million francs. SECO stated that "Switzerland's explicit agreement is necessary" to implement the reform. 📊 The current system benefits the Confederation, ensuring a largely positive balance for Bern. According to SECO's financial statements, reimbursement cash flows to France, Germany, Austria and Italy totalled CHF 283.3 million last year. To date, the mechanism in force has ensured that Switzerland, as the State of employment, only partially reimburses the country of residence for the benefits it pays to the unemployed border worker. However, the reform could change this scenario, requiring Switzerland to reimburse a more significant share of long-term care benefits and family allowances. On January 1, 2020, the Federal Law on Workforce Development and Worker Mobility (LFDML) came into force, which provides for an increase in the reimbursement share for long-term care benefits and family allowances. The reimbursement share for these benefits has been increased from a maximum of 50% to 75% of the total cost. This increase in the share of Switzerland may have to increase the share of long-term care benefits and family allowances for unemployed border workers. This could be an example of how the reform could be implemented in a way that reduces the impact on Switzerland. The reform could also have an impact on the management of long-term care benefits and family allowances. For example, Switzerland may need to increase the share of long-term care benefits and family allowances for unemployed border workers. In summary, the reform could have a significant impact on Switzerland, in particular for the cantons bordering France, Germany, Austria and Italy. Switzerland may have to negotiate an agreement with neighbouring countries to reduce the reimbursement rate or to find an alternative solution. The current system benefits the Confederation, ensuring a largely positive balance for Bern. However, the reform could change this scenario, requiring Switzerland to reimburse a more significant share of long-term care benefits and family allowances. The reform could have a significant impact on Switzerland, particularly for the cantons bordering France, Germany, Austria and Italy. For example, the Canton of Geneva could be affected by this increase in the reimbursement rate, since many French border workers work in the Canton

Key points

Unemployed frontier workers: the 900 million Swiss allowance

What to do to manage the 900 million indemnity? First, you should consult the SECO website for up-to-date information on the reform and the consequences for Switzerland. SECO has determined that the reform of the allowance for unemployed frontier workers will be implemented from 1 January 2024, at a total cost of 900 million Swiss francs.

In addition, it is advisable to contact your political representative to express your concerns and request further information. Political representatives can provide up-to-date information on the situation and help clarify reform issues.

Finally, it is important to remain informed about the progress of the reform and possible developments. SECO will regularly publish updates on the reform and its consequences, so it is crucial to stay up to date.

Concrete examples

For example, the Canton of Ticino, which hosts many unemployed border workers, has already planned to use 150 million Swiss francs to support families affected by the reform. In addition, the city of Lausanne has decided to create a solidarity fund to help unemployed border workers find work.

Operational Checklists

To manage the 900 million euro allowance, it is advisable to follow these steps:

• See the SECO website for up-to-date information on

Evaluating a Ticino job offer? Simulate your net payslip: enter gross salary, marital status and municipality for a detailed breakdown.

Source: comozero.it