13th AVS pension: VAT increase put to a vote on November 29

Context

TL;DR

• On November 29, there will be a vote on financing the 13th AHV pension
• The standard VAT rate would rise from 8,1% to 8,5%
• The accommodation rate would rise from 3,8% to 4%
• The first 13th AHV pension will be paid in December

Key facts

• Vote → November 29
• Measure → 13th AVS pension payment
• Initial support → over 58% of voters
• Standard VAT → from 8,1% to 8,5%
• Reduced VAT → 2,6%, unchanged

On November 29, voters will vote on the implementation of the measure introducing the 13th AVS pension payment. The vote comes two years after the vote that approved it with a clear double majority: over 58% of voters voted in favor.

From the vote to the funding

After the measure was approved, the issue of funding arose immediately. The initiative did not specify how to cover the new expenditure, but at the time of the vote it was already estimated that it would entail an additional outlay of approximately 4,1 billion francs per year. The source also notes that this amount was expected to grow rapidly.

The debate unfolded between the Federal Council and Parliament, with a lengthy and at times heated discussion. There were essentially two options: an increase in value-added tax supported by the Federal Council, or a mixed solution consisting of an increase in VAT and higher equal employer and employee payroll contributions for AVS.

After a couple of years of debate, the situation was resolved last June in favor of the first solution. Parliament accepted an indefinite increase in VAT. Since the measure requires a constitutional amendment, the final say will nevertheless rest with the people.

The timetable makes the decision imminent: the first 13th AVS payment will be paid to beneficiaries as early as December. The solution approved by the Chambers provides for an increase of 0,4 percentage points in the standard rate, from 8,1% to 8,5%. The special rate applied to the hotel sector would instead rise from 3,8% to 4%.

The reduced rate of 2,6%, applied to various everyday goods, including food and medicines, as well as to certain services in agriculture, would remain unchanged. According to the estimates reported by the source, the entire measure would entail an average additional burden of approximately 180 francs per household per year.

Operational details

Three rates, three treatments

The proposed structure clearly distinguishes the three VAT rates involved in financing the 13th AHV pension:

The comparison shows that the proposal does not apply the same increase to all rates. The increase concerns the standard rate and the special rate for the accommodation sector, while the reduced rate remains at 2,6%. The source associates the latter with everyday goods such as food and medicines and with certain agricultural services. The decision not to change it is also presented by the Federal Council and Parliament as an element of social fairness.

For households, the quantitative reference is an average additional burden of around 180 francs per year. The figure is expressed as an average: it is therefore not presented as an identical amount for every household. The source does not provide an individual calculation based on actual consumption, but describes the general criterion according to which the proposal would distribute the additional revenue.

Why VAT divides the political camps

The criticism stems from the very nature of the tax. As an indirect tax, VAT affects everyone through the same rates, regardless of income level or purchasing power. This is the point on which objections to financing the 13th AHV pension focus.

In the bourgeois camp, the consequences for household budgets are given priority. The solution proposed by opponents would not be another increase in VAT, but a combination of structural reforms and state budget priorities. On the left, by contrast, the shift in the tax burden toward consumption is emphasized, as is the greater burden that a tax such as VAT can place on people with limited means.

A minority had already opposed the proposal during the parliamentary debate. Its position was that expenditure related to the 13th AHV pension should be addressed within the framework of the next AHV reform, rather than financing the measure through an increase in value-added tax.

The Federal Council and Parliament, by contrast, defend the solution approved by the Chambers as a balanced measure. The stated rationale is the need to preserve the stability of AHV finances for future generations as well. Under this approach, the impact on people with medium or low incomes would be minimized, while those with higher incomes who consume more would contribute more to the additional VAT revenue.

Key points

Estimates on revenues, deficits and reserves

VAT financing is also assessed in relation to the development of the AHV accounts. It is estimated that from 2029 the higher levies could bring in just under 1.5 billion francs in additional revenue to the first pillar. The source points out that this contribution would help to reduce the impact of the payment of the 13th pension.

The most detailed comparison concerns 2035. Taking into account the additional funding, the AHV deficit is estimated at around CHF 3 billion, compared to CHF 5 billion in the other scenario. The gap between the two values is therefore around CHF 2 billion for that year. This is a report calculated on the values reported from the source, not a new forecast.

Reserves from the first pillar are also used as an indicator. For 2035, estimates place them at around 70% of annual insurance expenditure, compared to around 50% in the other scenario. The comparison indicates a difference of 20 percentage points between the two scenarios described, again based on the estimates reported.

A situation already under pressure

The source places these numbers within an already difficult financial framework. In the current year, AHV expenditures would be more than one billion francs higher than revenues. In addition, already the following year, the level of reserves would fall below the legal threshold of 100% of the insurance year's expenditure.

The payment of the 13th would have a further impact on a situation described as anything but reassuring. For this reason, the financing is not only presented as a question of revenue, but also as a measure linked to the deficit and the size of the AHV reserves.

The source does not quantify the additional cost per individual taxpayer, nor does it offer a distribution of the burden between different consumption or income groups. It also does not provide detailed amounts for the alternative based on wage contributions. The available data therefore make it possible to compare rates, the average burden per household and estimates on AHV accounts, but not to derive a personal figure for each voter or beneficiary.

For an official reference on pension provision, please refer to the AHV 2026 Synoptic Table. To learn more about pensions, please refer to consulta la pensione AVS.

Source: rsi.ch