Swiss Parliament Approves Partial Funding for 13th AVS Pension (cross-border guide)
0.4% VAT increase approved, wage contributions rejected: only half the 13th AVS pension costs covered
Contesto
In brief - Swiss Parliament approves VAT increase from 8.1% to 8.5% - Wage contributions not increased, limited financial coverage - 13th AVS pension will cost about CHF 4.2 billion from December 2026 ## Key facts - What: partial funding of the annual 13th AVS pension - When: parliamentary decision in 2026, first payment December 2026 - Where: Swiss Parliament, Bern - Who: National Council, Green Liberal Party - Amount: VAT increase of 0.4 percentage points The Swiss Parliament has approved a plan for only partial funding of the new annual 13th AVS pension. After intense debates, the National Council approved a 0.4% increase in the value-added tax (VAT), raising the standard rate from 8.1% to 8.5%. The reduced rate for hotels will go up from 3.8% to 4%, while the minimum rate of 2.6% for essential goods such as food and medicine will remain unchanged. This decision was made possible by a change in position from the Green Liberal Party, which had previously opposed a permanent VAT increase. However, Parliament rejected a proposal to raise wage contributions by 0.2 percentage points, a measure that was part of a compromise between the two chambers. By excluding this component, the VAT increase will cover only about half of the additional costs related to the 13th pension. The first payment is scheduled for December 2026, with an estimated total cost of about CHF 4.2 billion. ### Immediate implications The Federal Council had prepared backup plans in case Parliament did not approve any funding, considering a larger VAT increase or a combination of VAT and wage contribution increases. At present, neither chamber appears willing to support these solutions. Since the VAT increase requires a constitutional amendment, it will be subject to a popular and cantonal referendu...
Dettagli operativi
The partial approval of funding for the 13th AVS has significant practical implications for the Swiss economy and society. The increase in VAT directly affects the cost of living for residents, influencing the price of goods and services, and thus the purchasing power of families. ## Useful planning tools To estimate your pension strategy, use the pension planner and the pillar 3 simulator.
Punti chiave
For Swiss citizens and businesses, the parliamentary decision entails a series of actions and deadlines to consider in the coming months. ### Procedure and timeline 1. Final parliamentary vote: the VAT increase is expected to be definitively confirmed. 2. Constitutional referendum: likely scheduled for November 2026, it will involve both citizens and Cantons to approve the VAT increase as a constitutional amendment. 3. Business adjustments: once approved, companies will need to update billing systems and prices to reflect the new VAT rate. 4. 13th AVS payment: the first disbursement is planned for December 2026, advanced without full funding for about two years. ### What taxpayers need to do Taxpayers should prepare for price increases due to the higher VAT and consider the impact on their household budgets. It is advisable to monitor official communications from the Federal Council and cantonal offices for updates on exact timing and operational procedures. ### Useful tools The Frontaliere Ticino website provides a calculator to estimate the effect of the VAT increase on the cost of living and monthly expenses. Participation in the referendum will be a crucial moment to express one’s opinion on the sustainability of the national pension system and the role each citizen wants to assign to taxation and social contributions. Source: lenews.ch
Punti chiave
[{"q":"What is the VAT increase decided by the Swiss Parliament to finance the 13th AVS payment?","a":"Parliament has approved a VAT increase of 0.4%, raising the standard rate from 8.1% to 8.5%. The reduced rate for hotels will increase from 3.8% to 4%, while the minimum rate of 2.6% for food and medicine will remain unchanged."},{"q":"Why is the financing of the 13th AVS payment only partial?","a":"The proposal to raise payroll contributions by 0.2% was rejected by Parliament, so the VAT increase will cover only about half of the costs of the new pension benefit."},{"q":"When will the 13th AVS payment come into effect and how will it be financed in the meantime?","a":"The first 13th payment is scheduled for December 2026. Even if the referendum on the VAT increase is approved, payments will be made for about two years without dedicated funding, resulting in an estimated deficit of around 9 billion francs."}]
Frequently Asked Questions
- What is the VAT increase decided by the Swiss Parliament to finance the 13th AVS payment?
- Parliament has approved a VAT increase of 0.4%, raising the standard rate from 8.1% to 8.5%. The reduced rate for hotels will increase from 3.8% to 4%, while the minimum rate of 2.6% for food and medicine will remain unchanged.
- Why is the financing of the 13th AVS payment only partial?
- The proposal to raise payroll contributions by 0.2% was rejected by Parliament, so the VAT increase will cover only about half of the costs of the new pension benefit.
- When will the 13th AVS payment come into effect and how will it be financed in the meantime?
- The first 13th payment is scheduled for December 2026. Even if the referendum on the VAT increase is approved, payments will be made for about two years without dedicated funding, resulting in an estimated deficit of around 9 billion francs.