Employer s guide to social insurance edition

Transcription

1 Employer s guide to social insurance 2015 edition

2 Contents Introduction...3 Old Age and Survivors Insurance (AHVG)...4 Disability Insurance (IVG)... 5 Compensation for Loss of Earnings for Persons on Military Service or Maternity Leave (Compensation for Loss of Earnings Act, EOG)...6 Occupational Retirement, Survivors and Disability Pension Plans (BVG)...7 Compulsory Unemployment Insurance and on Insolvency (AVIG) Military Insurance (MVG) Accident Insurance (UVG) Supplementary to Old-Age, Survivors and Disability Insurance (ELG) Health Insurance (KVG)...20 Overview Practical guide... 27

3 Introduction 3 Social insurance a clear and concise overview Social insurance is a complex issue that demands expertise, responsibility and detailed knowledge from you as an employer. This brochure aims to help you tackle this challenge. It provides you with a concise, easily digestible overview of the Swiss social insurance system from the employer s perspective. For you, security is about much more than safety regulations or simple insurance benefits. Security comes from knowing that you have a capable partner that you can rely on at all times. In this regard have a lot to offer as an insurance partner with many years of experience. As a major provider of corporate insurance, we have dealt with the ins and outs of company pension provision for decades and we constantly monitor legislative and societal changes. Our products are thus promptly adjusted to changing social needs and statutory requirements. We can work with you to develop a comprehensive, cost-effective and appropriate insurance solution for your company s needs, for your security and for the benefit and wellbeing of your employees. And we also have an «Employee s guide to social insurance», which offers employees valuable advice and information. Our Baloise customer advisers can help you with all your professional and personal insurance needs. They have the extensive training and expertise needed to answer your insurance questions properly or, if necessary, put you in touch with one of our specialists. If your company wants to achieve more with less risk, simply call our office nearest to you.

4 4 Old Age and Survivors Insurance (AHVG) Old Age and Survivors Insurance (AHVG) of 20 December 1946, in force since 1 January 1948 Purpose AHV old-age and survivors insurance financially assists the insured person and his or her family members by replacing some of the income lost as a result of retirement or death. Pension benefits (as a percentage of the maximum single retirement pension) Maximum single retirement pension (men: 65 years, women: 64 years) If there are no gaps in contributory years: from CHF 1175., up to CHF per month Total of both pensions for spouses or registered partners Children s pension (men: 65 years, women: 64 years) Widower s pension (if there are children less than 18 years old) Widow s pension (if there are children or the insured person is over 45 years of age and was married for at least 5 years) Orphan s pension Either father or mother deceased Both father and mother deceased 100 % Up to 150 % of the maximum single retirement pension 40 % 80 % 80 % 40 % max. 60 % Insured persons (also applies to the IV) This insurance is compulsory for everyone whose residence or place of work is in Switzerland, or who is subject to the Swiss social security system as a result of the bilateral agreements with the EU. Persons who are employed and paid by a Swiss employer but who work abroad can maintain their insurance cover by mutual agreement with their employer. All EU and EFTA citizens, as well as Swiss citizens residing outside the EU and EFTA, can take out this insurance voluntarily, if, in the immediately preceding period, they had been compulsorily insured for at least 5 years without interruption. Contributions (also applies to the IV and EO) Insured persons are liable for contributions as long as they are gainfully employed and provided their annual salary from one employer exceeds CHF For non-gainfully employed persons, the contribution liability commences on 1 January after they reach 20 years of age. Non-gainfully employed spouses or registered partners are exempted from the contribution liability if the spouse or registered partner has paid contributions worth at least twice the minimum contribution (i. e. 2 CHF 480. per year, incl. IV/EO). Contributions are levied based on total income. The employee and employer each pay half of the contributions. Eligibility (pensions only) The following groups are eligible: Swiss citizens, refugees and stateless persons pursuant to federal legislation, and foreigners, provided they are resident in Switzerland. The residency requirement no longer applies to EU and EFTA citizens. Benefit period Children s and orphans pensions are paid until 18 years of age. Children in education or training are entitled to benefits until they complete their studies, or until they turn 25 years of age, whichever comes first. Widows and widowers pensions cease upon remarriage. Widowers pensions also cease when the widower s youngest child turns 18. Procedure in the case of divorce, legal separation or dissolution of a registered partnership If a married couple divorces, each spouse receives half of the combined income earned during the marriage, including any educational and care allowances (this does not cover the year of marriage and the year of divorce), credited to his/her individual account. The divorce settlement must include this mandatory splitting of AHV credits. If the joint household is legally dissolved, then the ceiling for the shared spouses pension of 150 per cent of the maximum single AHV retirement pension no longer applies. The same procedure is applied in the case of dissolution of a registered partnership.

5 Disability Insurance (IVG) 5 Disability Insurance (IVG) of 19 June 1959, in force since 1 January 1960 Purpose The IV s most important principle is «integration first, pension second». A disability pension is only paid if the disabled person can no longer be integrated into the labour market at all or can only be partially integrated. Revisions to pensions also aim at reintegrating IV pension recipients into working life if possible. Insured persons and contributions (cf. AHV) What does disability mean? Disability is defined as a presumed permanent or long-term incapacity for work due to a physical, mental or psychological health impairment caused by a congenital disorder, illness or accident. Pension benefits (as a percentage of the maximum single retirement pension) Maximum single disability pension 100 % Total of both pensions for spouses or registered partners (if both spouses or registered partners are disabled) Single children s pension (if the father or mother is disabled) Double children s pension (if both parents are disabled) Up to 150 % of the maximum single retirement pension 40 % 60 % IV benefits mainly consist of occupational integration measures and pensions. Occupational integration measures The integration measures include: Medical treatment Occupational programmes (career counselling, first-time vocational training, retraining and job placement) Integration measures in preparation for workplace entry The provision of physical aids Daily disability allowances (80 per cent of the last earnings but not more than 80 per cent of CHF per year). Insured persons, including pension recipients who are disabled or imminently threatened by disability, are entitled to occupational integration measures if the measures are necessary and appropriate for restoring, improving or maintaining the insured person s capacity for work. Pensions The level of the disability pension equals the AHV retirement pension and depends on the established degree of disability: Degree of disability At least 40 % At least 50 % At least 60 % At least 70 % Pension entitlement (as a fraction of a full pension) One quarter One half Three quarters Full pension Insured persons are entitled to draw a disability pension if their incapacity for work is permanently rated 40 per cent or more, or if their incapacity for work averaged 40 per cent over one year without any significant interruptions and they remain unable to work. Benefit period Disability pensions are paid out when the beneficiaries turn 18 years of age, but no earlier than six months after the entitlement to benefits has been established. The entitlement lapses if the disability ceases (in some cases only after completion of the rehabilitation and workplace reintegration measures), the beneficiary dies or the AHV pension begins. Children s pensions are paid until 18 years of age. Children who have not yet completed their college education or vocational training are entitled to receive benefits until they complete their education/training, or until they turn 25 years of age, whichever comes first.

6 6 Compensation for Loss of Earnings for Persons on Military Service or Maternity Leave (Compensation for Loss of Earnings Act, EOG) Compensation for Loss of Earnings for Persons on Military Service or Maternity Leave (Compensation for Loss of Earnings Act, EOG) of 25 September 1952, in force since 1 January 1953 Purpose The Compensation for Loss of Earnings Act provides reasonable compensation for salary and earnings lost due to participation in military, civilian and other services described in the Act. The Act also establishes the duration and amount of the compensation for loss of earnings paid to working mothers on maternity leave. Contributions The following are obligated to pay contributions: employees and employers liable for AHV contributions, who each pay half the contribution of 0,5 per cent of the income from gainful employment. Minimum and maximum amount in CHF per day Basic compensation, regardless of marital status: In general During military promotion service For recruits and those liable for enlistment without children 61. / / attending federal and cantonal coaching classes for the «Jugend+Sport» summer sports camps or youth marksmanship courses (for every whole day of the course); enlisted for the recruiting days. The total compensation consists of the basic compensation and the children s allowances. Allowances for care costs and business costs are paid over and above the total compensation and are never reduced. Compensation for loss of earnings during maternity leave Women in gainful employment are entitled to 14 weeks of paid maternity leave, provided they were compulsorily insured in accordance with the AHVG for the nine months prior to the birth and were in paid employment for at least five months during this period. The maternity leave compensation is paid through the employer as a daily allowance. The daily allowance amounts to 80 per cent of the mother s average earnings from gainful employment before giving birth. The allowance is capped at CHF 196. per day. Children s allowance: Per child 20. Maximum total compensation 245. * Care cost allowance Up to 67. Business cost allowance 67. * This ceiling applies even if the total of basic compensation and children s allowances exceeds CHF Compensation for loss of earnings for persons on military/ civilian service Eligible beneficiaries The eligible beneficiaries are persons residing in or outside Switzerland who are: serving in the Swiss army or the Swiss Red Cross (for every paid day of service); serving in the civilian service (for every creditable day of service); serving in the civil defence service (for every day for which they are paid);

7 Occupational Retirement, Survivors and Disability Pension Plans (BVG) 7 Occupational Retirement, Survivors and Disability Pension Plans (BVG) of 25 June 1982, in force since 1 January 1985 Purpose AHV/IV (first pillar) and BVG (second pillar) benefits are intended to enable the elderly, disabled and survivors to maintain their accustomed standard of living in an appropriate manner. The minimum statutory benefits are described below. Pension funds may offer additional benefits. Insured persons Compulsory insurance Employees who receive more than CHF in annual salary from an employer are insured against death and disability starting on the first day of January after they turn 17 years of age, and are insured against old age starting on the first day of January after they turn 24 years of age. Secondary employment activities are not eligible for compulsory BVG cover if the insured person is already insured in his/her main occupation under a compulsory occupational pension plan or his/her main occupation is a self-employed activity. Retirement assets consist of: Retirement credits Portable benefits transferred into the fund Additional voluntary contributions Divorce settlement payments received Interest earned on all the amounts above Retirement credits are calculated each year as a percentage of the pensionable salary. The rates are: Age for women/men /65 Rate as a percentage of pensionable salary 7 % 10 % 15 % 18 % Voluntary insurance for self-employed persons Self-employed persons with employees can insure themselves with their employees pension fund, their trade association s pension fund or the Substitute Occupational Benefit Institution (national substitute pension scheme). Self-employed persons who do not have employees can choose between the last two options. Pensionable salary The insurance covers annual salaries between CHF and CHF The maximum salary that can be insured is CHF , and is known as the pensionable (or coordinated) salary. A minimum amount of CHF is insured for annual salaries between CHF and CHF If an insured person is partially disabled according to IV criteria, the lower and upper limits (CHF and CHF ) are reduced by a fraction of the full disability pension in proportion to the degree of disability. Contributions The employer must pay at least half of the total contributions for all staff. The contributions consist of the retirement credits, the risk premium and the additional costs that must be levied by law (adjustments for inflation and contributions to the BVG Security Fund). The employer transfers the full contributions to the pension fund. Retirement benefits Retirement pension Entitlement to an AHV retirement pension begins at the age of 64 (women) or 65 (men). The Pension Regulations of the individual pension fund may allow for continued insurance cover until the age of 70. The retirement pension is calculated as a percentage of the retirement assets that the insured person has accumulated up to retirement age. On retirement at 64/65, the conversion rate applied to assets under the compulsory scheme is 6.8 per cent. Pension funds may apply different conversion rates to the non-compulsory components of the retirement assets. Pensioners children s pensions If insured persons are entitled to a retirement pension, then they are also entitled to pensioners children s pensions for every child that could claim an orphan s pension in the event of their death. Pensioners children s pensions are equal to 20 per cent of the retirement pension.

8 8 Occupational Retirement, Survivors and Disability Pension Plans (BVG) Lump-sum settlements Insured persons can request that a quarter of their retirement assets be paid out as a single lump-sum settlement. If permitted by the individual pension fund s Pension Regulations, insured persons can also request a full lump-sum settlement instead of a retirement pension. resulting from voluntary additional contributions may not be drawn as a lump-sum payment for a period of three years. Disability benefits Disability pension Disabled persons are entitled to a disability pension, provided they are at least 40 per cent disabled according to IV criteria and were insured on the date of being incapacitated for work due to the same reason that subsequently lead to the disability. The entitlement ceases when the insured person dies or is no longer disabled. Amount of disability pension Disability pensions are calculated based on the same conversion rate that is used to calculate the retirement pensions. The underlying retirement assets consist of: the retirement assets accumulated by the insured person up to the date he or she became entitled to the disability pension; the total non-interest-bearing retirement credits for the years remaining until retirement age. Often, however, the disability pension is defined as a percentage of the pensionable salary. The pension fund can reduce the disability pension if the total benefits and other qualifying income exceed 90 per cent of the estimated loss in earnings. Disabled persons children s pension If insured persons are entitled to a disability pension, then they are also entitled to a disabled person s children s pension for every child that could claim an orphan s pension in the event of their death. The disabled person s children s pension is 20 per cent of the disability pension. Entitlement to children s pensions The children s pension entitlement ceases when the child dies or reaches 18 years of age. However, the entitlement remains in force until 25 years of age for children until they complete their initial education or training, until they are capable of working, provided they are at least 70 per cent disabled. Survivors benefits Widow s or widower s pension The surviving spouse is entitled to a widow s or widower s pension if, at the date of the spouse s death, he or she: is responsible for the maintenance of one or more children; or is at least 45 years of age and the marriage lasted at least five years. If the surviving spouse fails to meet any of these conditions, he or she is still entitled to a one-off settlement equal to three annual pension payments. The surviving spouse is entitled to the widow s or widower s pension from the date of the insured person s death but no earlier than the date when full salary payments are stopped. The entitlement ceases when the widow or widower remarries or dies. Upon the insured person s death, the widow s or widower s pension is equal to 60 per cent of the full disability pension that the insured could have claimed. If an insured person who is drawing a retirement or disability pension dies, then the widow s or widower s pension is equal to 60 per cent of the last retirement or disability pension paid. Surviving registered partners have the same legal status as widows or widowers. Orphan s pension Children of a deceased insured person are entitled to orphans pensions; foster children can only claim a pension if the deceased person was responsible for their maintenance. The orphan s pension is equal to 20 per cent of the full disability pension. Pensions for divorced spouses Divorced spouses are treated the same way as widows or widowers after the death of their former spouse as long as the marriage lasted at least 10 years and the divorced spouse was awarded a pension or a lump-sum settlement in place of a life-time pension in the divorce settlement. However, the pension can be reduced by the amount by which the pension and benefits from other forms of insurance in particular the AHV and IV exceed the amount awarded under the divorce settlement. Former registered partners are treated the same as divorced spouses after the death of their former registered partner.

9 Occupational Retirement, Survivors and Disability Pension Plans (BVG) 9 Lump-sum settlements If permitted under the Pension Regulations, the widow or widower can request a lump-sum settlement instead of a widow s or widower s pension. The surviving spouse must submit the declaration requesting the lump-sum settlement to the pension fund before the first pension payment. The same applies to surviving registered partners. Additional statutory costs Adjustment for inflation Survivors and disability pensions that have been paid for a period of more than three years are adjusted for inflation until the age of 65 for men or 64 for women. BVG Security Fund The BVG Security Fund (LOB Guarantee Fund) pays subsidies to pension funds with an unfavourable age structure (an average retirement credit of more than 14 per cent) and covers expenses incurred by compensation offices. It guarantees the statutory benefits of insolvent pension funds up to one-and-ahalf times the upper BVG limit (CHF ). Contributions to the Security Fund include: 0,08 per cent of the total pensionable salaries of all insured persons paying retirement pension contributions (to cover subsidies for funds with an unfavourable age structure); 0,01 per cent of the regulatory withdrawal benefits for all insured persons as at the 31 December and the same percentage of ten times the total amount of pensions reported in the operating statement (to cover insolvency and other benefits). Portable benefits Employees with a BVG retirement pension plan who change their employer receive a withdrawal benefit (portable benefit) from their former employer s pension fund. If the employees remain covered under the BVG at their new company, they must transfer their withdrawal benefits into the new pension fund. If they are no longer covered under the BVG, they can transfer the withdrawal benefits to a portable benefits account or a portable benefits policy. Employees who permanently change their place of residence from Switzerland to an EU or EFTA country can receive the non-compulsory part of the withdrawal benefits as a cash payment. If employees establish their place of residence outside the EU or EFTA, they can have their entire withdrawal benefits paid out in cash. Promotion of home ownership out of pension funds Insured persons can withdraw or pledge occupational pension fund assets to finance the purchase of a residential property for personal use up to three years before they become entitled to a retirement pension, whereby the available assets are not limited to the compulsory BVG minimum. However, additional voluntary contribution amounts may not be used for the purposes of financing home ownership for a period of three years after the voluntary contribution was made. Withdrawals and pledges are governed by the BVG and the statutory provisions for the promotion home ownership out of pension funds. Compulsory insurance for unemployed persons Unemployed persons who receive a daily allowance of at least CHF are insured with the Substitute Occupational Benefit Institution (the national substitute pension plan) for the minimum BVG benefits in the event of death and disability. The unemployment office deducts the insured person s contribution from his/her daily allowance and transfers it to the Substitute Occupational Benefit Institution along with the employer s contribution, which the unemployment office pays. Divorce If spouses divorce before an insured event occurs, the withdrawal benefits saved up during the period of marriage are divided equally. Additional voluntary contributions classified by law as own property under the statutory matrimonial property regime are not subject to splitting. If one or both spouses experience an insured event before the divorce, reasonable compensation is owed directly by the spouse instead of dividing the withdrawal benefits. The rules for divorces also apply, mutatis mutandis, to legal dissolutions of registered partnerships.

10 10 Compulsory Unemployment Insurance and on Insolvency (AVIG) Compulsory Unemployment Insurance and on Insolvency (AVIG) of 25 June 1982, in force since 1 January 1984 Purpose Unemployment insurance provides reasonable loss of earnings compensation in the case of unemployment and provides financial benefits to finance measures to prevent and combat unemployment. Insured persons This insurance covers employees who are compulsorily insured with the AHV and pay AHV contributions on income from employment. Family members who work on a family farm are not compulsorily insured, but are treated as self-employed farmers. Self-employed persons cannot take out unemployment insurance. Types of benefits Unemployment benefits Short-time work allowance Inclement weather allowance Allowance in the case of employer insolvency Financial benefits for labour market measures Contributions Insurance contributions depend on the AHV salary and are capped at the maximum pensionable earnings subject to compulsory accident insurance and converted into months (CHF per year or CHF per month). The contribution rate is set at 2,2 per cent and the employee and employer each pay half the contribution. If the employer is not required to pay contributions, the employee pays the full amount. In addition, until the structural debt of the unemployment insurance is repaid, a jointly financed solidarity contribution of 1 per cent is charged on the salary component between CHF und CHF Unemployment benefit Insured persons are entitled to receive an unemployment benefit if they meet all of the following criteria: are fully or partially unemployed; have suffered a qualifying loss of work; reside in Switzerland; have completed their compulsory education, have not reached the AHV retirement age and are not drawing an AHV retirement pension; have completed the contributory period or are exempted from completing it; are employable; and fulfil the employment office s requirements. Contributory periods spent in an EU/EFTA country also count towards the completion of the contributory period for Swiss and EU/EFTA citizens employed under permanent or multiyear contracts. Insured persons must look for new employment immediately after receiving notice of termination that is, during the notice period and during the entire period of unemployment. They must regularly show copies of applications, notes of verbal applications, etc., to the employment office as proof of their efforts. Short-time work allowance Employees whose regular working hours are reduced or whose work is discontinued entirely are entitled to receive a shorttime work allowance if: they are liable for insurance contributions; the loss of work qualifies; the employment relationship has not been terminated; the loss of work is presumed to be temporary and a shorttime work programme is expected to save jobs. The introduction of short-time work requires the verification and approval of the employment office s cantonal office.

11 Compulsory Unemployment Insurance and on Insolvency (AVIG) 11 Inclement weather allowance The inclement weather allowance is only paid in certain industry sectors where losses of income due to meteorological conditions are common (mainly in construction, civil engineering and related trades). Allowance in the case of employer insolvency Employees are entitled to an allowance in case of employer insolvency if: they have earnings claims against their employer when the employer files for bankruptcy; or they have filed a seizure request for earnings claims against their employer. Labour market measures Labour market measures (e. g. further training) are intended to help integrate insured persons into the workplace who are harder to place due to the state of the labour market. Amount of benefits Unemployment A full daily allowance is 80 per cent of the pensionable earnings. A daily allowance of 70 per cent of the pensionable earnings is paid to insured persons who are less than 40 per cent disabled, are not obligated to pay maintenance to children under 25 years of age and have a full daily allowance in excess of CHF Entitlement to the daily allowance is limited to salary components of up to CHF per month or CHF per year. Insured persons can claim five daily allowances per week. In addition to the daily allowance, claimants receive a supplement equal to the lost children s allowances. AHV contributions must be paid from the daily allowances in order to avoid AHV contribution gaps. At most, two thirds of the premium for compulsory non-occupational accident insurance must also be paid. Contributions for the compulsory occupational pension are also deducted from the daily allowance, which ensures the provision of insurance cover in the event of disability and death. The unemployment office takes all the necessary steps in all cases. For persons who are not obligated to pay maintenance to children under 25, and have pensionable earnings of at least CHF per month, no daily allowance is paid for the first 5, 10, 15 or 20 days, depending on the amount of the pensionable earnings. If the insured person is obligated to pay child maintenance, no five-day waiting period applies, provided the pensionable earnings does not exceed CHF per month. Short-time work and inclement weather allowance The short-time work and inclement weather allowances are each equal to 80 per cent of the qualifying loss of earnings. Allowance in the case of employer insolvency The insolvency allowance covers salary claims from the last four months prior to the declaration of bankruptcy or the seizure request, but only up to CHF per month. Labour market measures The insurance pays daily allowances to insured persons for the days they spend planning their self-employment or participating in a training or employment programme as per a decision made by the competent authority. Benefit period and reference period The number of daily unemployment allowances to which an insured person is entitled depends on the person s age and a contributory period (see box) of at least 12 months during a two-year reference period. The reference period commences two years before the date when all the requirements for receiving daily allowances are met for the first time (generally the first day of registered unemployment). Entitlement to unemployment benefits (ranked by age and contributory period) Contributory period of at least 12 months Contributory period of at least 18 months Contributory period of at least 22 months and at least 55 years of age Contributory period of at least 22 months and drawing an IV disability pension of at least 40 per cent If unemployed during the four years prior to reaching AHV retirement age Persons exempted from the contributory period Persons up to 25 years of age, without children and a contributory period of at least 12 months Up to 260 daily allowances Up to 400 daily allowances Up to 520 daily allowances Up to 520 daily allowances 120 additional daily allowances Up to 90 daily allowances Up to 200 daily allowances

12 12 Military Insurance (MVG) Military Insurance (MVG) of 19 June 1992, in force since 1 January 1994 Purpose The military insurance scheme provides people with benefits due to an incapacity for work or earnings incapacity occurring while they are serving in the security and peace services (army, civil defence, civilian service, humanitarian aid, etc.). This is a comprehensive assumption of risk to ensure national/ social security. Insured persons Insurance cover is provided specifically to: members of the army and civil defence who are serving compulsorily or voluntarily; people rendering civilian service; members of the Instruction Corps, the Military Police and the Swiss Humanitarian Aid Unit; participants in recruitments and inspections, off-duty firearms training, voluntary off-duty military activities or military sports activities, and peacekeeping activities of Switzerland s Good Offices. Contributions The insurance is exempted from contributions. The Swiss Federal Government bears all costs. The maximum pensionable earnings are CHF Insurance term Insurance cover is provided for the entire duration of the service or training. The insurance also covers the journey to and from the service/training site as long as it is completed within a reasonable period. The insurance is suspended while the insured person remains compulsorily covered by the UVG insurance and in gainful employment.

13 Military Insurance (MVG) 13 The most important benefits Daily allowances Insured persons who are incapacitated for work due to a health impairment are entitled to a daily allowance. In the case of persons who are fully incapacitated for work, the daily allowance is equal to 80 per cent of the pensionable earnings. If they are partially unable to work, the daily allowance is reduced accordingly. Occupational integration measures Insured persons who are disabled or imminently threatened by disability are entitled to occupational integration measures if the measures are necessary and appropriate for maintaining or improving the insured person s social integration or remaining capacity for work. As a rule, the occupational integration measures are provided in Switzerland. Apart from medical arrangements and the provision of physical aids, the integration measures consist of arranging and financing occupational and social integration programmes as well as providing compensation for any loss of earnings for the duration of the measures. Disability pension An annual disability pension of 80 per cent of the pensionable earnings is paid in case of a full disability. The pension is reduced accordingly in the case of a partial disability. Compensation for self-employed persons If self-employed persons suffer an additional loss from ongoing fixed operating costs due to the structure of their business while they are incapacitated for work, then this loss is reasonably compensated provided it is deemed unavoidable despite the diligent management of the business. Self-employed persons may receive additional compensation payments if their health impairment prevents them from maintaining their business out of the daily allowance and any existing compensation that they may be receiving. The additional compensation payments and the regular compensation must not, however, jointly exceed double the maximum qualifying annual earnings. Additional benefits Medical treatment (medical care) Assumption of travel and rescue costs Compensation of funeral costs Allowances for home care, spa treatments and long-term care Physical aids Settlements and damage payments Retirement pensions for disabled insured persons Pensions for physical and mental impairment Cover for property damage. Survivors pensions The spouse, children, parents and divorced spouse of a deceased insured person may be entitled to a survivors pension depending on the individual circumstances. Survivors pensions (as a percentage of the pensionable earnings) Spouse 40 % Divorced spouse, maintenance no longer payable Up to 20 % Half orphan 15 % Full orphan 25 % Parents: only if a need is recognised Up to 20 %

14 14 Accident Insurance (UVG) Accident Insurance (UVG) of 20 March 1981, in force since 1 January 1984 Insurer Compulsory and voluntary accident insurance is provided by: private insurance companies and public accident insurance funds; the Swiss National Accident Insurance Fund (SUVA) for the companies for which it is responsible; recognised health insurance funds, although the pensions have to be provided by a private insurer in this case. Health insurance fund must therefore agree to partner with private insurance companies for this purpose. Except for persons insured through SUVA, employees have a right to participate in selecting the insurer. Purpose Accident insurance provides reasonable loss of earnings compensation for income lost due to occupational accidents, occupational illnesses or non-occupational accidents. Accident insurers also take action to prevent occupational accidents and illnesses at companies. Insured persons Compulsory insurance This insurance is compulsory for all employees working in Switzerland. This includes: farm workers; household domestic staff; cleaning ladies in private households; people working from home; apprentices, unpaid interns, trainees and career entrants working for an employer in order to explore a prospective career, for the duration of this activity (workplace trial trainees); people working in training or sheltered workshops; people in secondary employment who pay contributions to the AHV for this activity; the employer s family members working in the employer s business if they receive earnings in cash and/or pay contributions to the AHV; retirees (AHV benefit recipients) who continue to work as employees, even if no contributions are paid to the AHV.. Persons not subject to the compulsory scheme In addition to the self-employed, the following persons are not compulsorily insured: family members working in the family business who do not receive earnings in cash and do not pay contributions to AHV or persons who are treated as self-employed farmers; members of boards of directors who do not work at the company; persons carrying out activities in the public interest who do not have a contract of employment (e. g. members of parliament, public agencies and commissions); Swiss government employees subject to military insurance; persons residing in an EU/EFTA country who work in that country and in Switzerland. Voluntary insurance Self-employed Swiss residents and family members working in the family business who are not subject to compulsory insurance can take out accident insurance voluntarily. This also applies to persons pursuing self-employment in Switzerland who reside in an EU/EFTA country but who were subject to Swiss Social insurance law at some point in the past. Voluntary insurance is not available for non-gainfully employed employers who merely employ household domestic staff. If the business is subject to SUVA, voluntary insurance must be taken out with SUVA, regardless of whether any staff are employed. If the business is not subject to SUVA, then voluntarily insured persons must be included in the employees contract. If there are no employees, insurance can be taken out with a private insurer or a health insurance fund. Scope of cover and premiums Insured benefits are paid in the event of occupational accidents, occupational illnesses and non-occupational accidents. Part-time employees are only insured against non-occupational accidents if they work for the same employer for at least eight hours per week. The premium is levied on all earnings that are subject to premiums. This is (generally) equal to the pensionable salary. The premium for occupational accidents and occupational illnesses is borne by the employer; the premium for non-occupational accidents is charged to the employee unless other arrangements have been made in

15 Accident Insurance (UVG) 15 the employee s favour. The entire premium is owed by the employer, who deducts the employee s share of the contribution from the employee s salary. Pensionable salary The pensionable salary is equal to the AHV salary, subject to a limit of CHF per year or CHF 346. per day. The pensionable salary is also understood to mean earnings on which no contributions to AHV are payable due to the insured person s age, and also family allowances granted as children s, training or household allowances. Insurance term Insurance cover commences on the date that the employee commences employment or should have commenced employment in accordance with the employment agreement, but in any case at the time they leave for work. Insurance cover ends on the 30th day after the date on which employees lose their claim to at least half of their salary. The insurance cover for non-occupational accidents can be extended by a maximum of 180 days by taking out insurance by special agreement within the 30-day extension of cover period. The insurance cover continues if at least 50 per cent of the earnings or daily allowances are paid, i.e. also in case of illness and accident. Unemployed persons entitled to daily allowances under unemployment insurance have compulsory accident insurance with SUVA. The insurance remains in force for two years and can be extended to up to six years if employees are transferred abroad and were compulsorily insured in Switzerland immediately before their transfer. Insurance cover continues for one year after the employee has been transferred to an EU/EFTA country. This period can be extended with official approval. Insurance cover is suspended for as long as the insured person is subject to military insurance or foreign compulsory accident insurance. Care allowance and reimbursement of costs Medical treatment The insurance pays the costs of: outpatient treatment by a doctor, dentist or medical assistants acting on a doctor s or dentist s orders, or by a chiropractor; pharmaceutical drugs and tests prescribed by a doctor or dentist; treatment, food and accommodation in the general ward of a hospital; convalescence and spa treatments prescribed by a medical practitioner, Any remedies and objects required for the medical recovery.

16 16 Accident Insurance (UVG) Medical treatment abroad The insured person receives refunds of up to twice the amount of the expenses that would have been incurred for treatment in Switzerland. Medical treatments in EU and EFTA countries are subject to special provisions. Home care Contributions for home care are paid as long as the treatment is provided by approved home nursing staff. Physical aids The insured person is entitled to aids that compensate for physical impairments or functional deficiencies (e. g. prostheses). Loss of or damage to property The cost of repairing damage caused as a result of an accident to property that acts as a replacement for a part of the body or a physical function (e. g. damage to prostheses in use) are reimbursed. The replacement of spectacles, hearing aids and dentures may only be claimed for in connection with a bodily injury requiring treatment. Travel, transportation and rescue costs Compensation is paid for any necessary rescue and recovery costs and the cost of medically required travel and transportation. Rescue, recovery, travel and transportation costs incurred abroad are reimbursed to the value of up to 20 per cent of the maximum amount of insured annual earnings. Transport of deceased persons As a rule, the costs necessary for transporting deceased persons to the place of interment are reimbursed. Funeral costs Compensation is paid for funeral costs provided that they do not exceed seven times the maximum pensionable daily salary. Cash benefits Daily allowances Insured persons are entitled to a daily allowance if they are totally or partially incapacitated for work as a result of an accident. The daily allowance is paid for each calendar day starting on the third day after the date of the accident. The daily allowance for total incapacity for work is equal to 80 per cent of the pensionable salary, and is reduced for partial incapacity for work accordingly. The daily allowance is not paid as long as the insured person can claim a daily allowance under the IV or a maternity allowance under the income compensation regulations (EO). For stays at hospitals, sanatoriums and clinics, the following deductions are made from the daily allowances for maintenance expenses covered by the accident insurance: 20 per cent of the daily allowance, but no more than CHF 20. for single persons without maintenance or support obligations; 10 per cent of the daily allowance, but no more than CHF 10. for married persons and for single persons with maintenance or support obligations insofar as the next paragraph is not applicable. For married or single persons who are responsible for minors or children in education or training, no deductions are made. Disability pension Insured persons who become at least 10 per cent disabled as a result of the accident are entitled to a disability pension. The pension for total disability is 80 per cent of the pensionable salary, and is reduced for partial disability accordingly. If insured persons are entitled to an IV or AHV pension, they are granted a supplementary pension to bring the AHV or IV pension up to 90 per cent of their pensionable salary. However, the maximum amount paid must not exceed the amount payable for total or partial disability. If the pension recipient s degree of disability changes significantly, the pension is increased or reduced accordingly, or discontinued if the pensioner has regained his or her full capacity for work.

17 Accident Insurance (UVG) 17 Allowance for physical and mental impairment Insured persons whose physical or mental state is permanently and significantly impaired as a result of an accident are entitled to an adequate allowance for the impairment in the form of a lump-sum benefit. An allowance for physical and mental impairment can also be granted without simultaneously awarding a pension. Helplessness care allowance Insured persons who, due to a health impairment, permanently require personal supervision or the assistance of a third party to carry out everyday living activities are entitled to a helplessness care allowance. Survivors pensions If the insured person dies as a result of the accident, then the surviving spouse and children are entitled to survivors pensions. The survivors pensions are, as a proportion of pensionable salary: 40 per cent for widows and widowers (only under certain conditions); 15 per cent for half orphans; 25 per cent for full orphans; a combined total of no more than 70 per cent for multiple survivors; 20 per cent for the divorced spouse, but no more than the maintenance allowance owed. If the survivors are entitled to AHV or IV pensions, then they are granted a supplementary pension to bring the AHV or IV pension up to 90 per cent of pensionable earnings. However, the maximum amount paid must not exceed the amount payable under the aforementioned scale. Adjustment of pensions to inflation Reduction and denial of benefits Disability pensions, allowances for physical and mental impairment and survivors pensions are reduced if the health impairment or death is only partly the result of an accident. If insured persons deliberately cause their own death or impair their own health, then, except for funeral costs, there is no entitlement to insured benefits. If the insured person caused the accident by gross negligence, the daily allowances paid by the insurance for non-occupational accidents are reduced in the first two years following the accident. If the insured person caused the accident by intentionally committing a felony or offence, cash benefits can be reduced or, in particularly serious cases, denied. All insured benefits are denied in the case of accidents that occur while insured persons are serving in a foreign military or participating in war-like activities, acts of terrorism or organised crime. Cash benefits are reduced by at least half for accidents that occur due to: participation in brawls or fights, unless the insured person was injured by the persons fighting while trying to assist a defenceless person or was an innocent bystander; hazards to which insured persons expose themselves by severely provoking others; participation in civil unrest. In the case of non-occupational accidents resulting from the insured person taking a hazardous risk, monetary benefits are reduced by half, or refused in particularly serious cases. Hazardous exposure to risks are actions that expose the insured person to a particularly high level of danger, where the insured person did not or was not able to take the precautions needed to limit the risk to a sensible level (e. g. motorcycle races, climbing buildings, etc.). However, actions taken to rescue other persons are insured even if they are to be considered hazardous. Pensions are adjusted for inflation in accordance with the Swiss Consumer Price Index at the same time as AHV pensions.

18 18 Supplementary to Old-Age, Survivors and Disability Insurance (ELG) Supplementary to Old-Age, Survivors and Disability Insurance (ELG) of 6 October 2006, in force since 1 January 2008 Purpose Supplementary benefits were introduced to ensure that, in accordance with the constitutional mandate, all AHV/IV pension recipients and recipients of IV daily allowances receive sufficient income to cover their basic subsistence needs. In order to achieve this objective, the federal government and the cantons award supplementary benefits to cover the basic subsistence needs of persons who meet the qualifying conditions. Persons entitled to benefits Persons have an individual entitlement to supplementary benefits provided they are aged 18 or over and are domiciled and habitually resident in Switzerland. Foreigners must have lived in Switzerland for a continuous period of ten years (qualifying period) immediately prior to the date on which the supplementary benefit is claimed. The qualifying period for refugees and stateless persons is five years. Special provisions exist for nationals of countries with which Switzerland has concluded a social security agreement. Entitlement to supplementary benefits is limited to: recipients of an AHV old-age or survivors pension; recipients of an IV disability pension or daily allowance (that has been received for a minimum of six months); and recipients of an IV helplessness allowance who have reached the age of 18, whose pension, daily allowance or helplessness allowance does not fully cover their basic subsistence needs. Contributions The annual supplementary benefits are not financed by deductions from salary, but are paid for by the federal government (five eighths) and the cantons (three eighths). The annual supplementary benefit is a cash benefit. It corresponds to the amount by which the approved expenditure exceeds the applicable income. The approved expenditure amounts are as follows: Amount for the general living expenses of: single persons married couples each of the first two children each of the two subsequent children each further child Actual rental costs for a home for single persons up to a maximum of: for married couples up to a maximum of: Expenditure to secure earned income (costs to obtain income from gainful activity) Building maintenance costs, if applicable Social insurance contributions Flat-rate amount (varies by canton) for compulsory health insurance Any maintenance contributions made under family law CHF, per year Actual costs Actual costs Actual costs As stipulated by the canton Actual costs Relevant income includes a proportion of the earned income and a proportion of the assets, the AHV/IV pension or IV daily allowance received, as well as any family allowances and maintenance payments received.

19 Supplementary to Old-Age, Survivors and Disability Insurance (ELG) 19 Adjustment of benefits to inflation As a rule, the Federal Council reviews the approved expenditure and relevant income amounts every two years and adjusts them if required. As a result, the supplementary benefit amount paid out may be adjusted upwards or downwards. Distinction between supplementary benefits and social welfare Social welfare also serves to cover basic subsistence needs. However, this is intended first and foremost for people who do not receive an AHV/IV pension or IV daily allowance and who are therefore not entitled to supplementary benefits. If the income or financial situation of a person receiving social welfare improves significantly, the social welfare received must be repaid. In contrast, supplementary benefits that have been paid out do not have to be repaid under any circumstances.

20 20 Health Insurance (KVG) Health Insurance (KVG) of 18 March 1994, in force since 1 January 1996 Purpose The KVG governs social health insurance. This includes compulsory healthcare insurance and voluntary daily sickness allowance insurance. Social health insurance provides benefits in the event of illness, accident (provided it is not covered by accident insurance) and maternity. Insured persons This insurance principally covers all residents of Switzerland. Immigrants to Switzerland must take out insurance within three months after taking up residence. Also subject to compulsory insurance are cross-border commuters of individual EU and EFTA countries and recipients of a Swiss pension and their family members living in those countries. Employees transferred to an EU country remain insured for one year. Employees transferred to any other country remain insured for two years. Extensions are possible with approval from the authorities. Premiums All adult insured persons living in the same region pay the same premium to their health insurance fund. In addition, they pay some of the costs of the benefits they receive with a fixed-sum excess (2015: minimum CHF 300. ) and a deductible of 10 per cent, limited to a maximum of CHF There is no deductible for maternity benefits. In some cases, special regulations apply to the fixed-sum excess and deductible for persons residing in an EU/EFTA country. Insured persons can reduce the premium or the deductible by agreeing to a restriction in their choice of service provider (e. g. doctor) or an increase in the fixed-sum excess. The cantons offer premium discounts to indigent insured persons. (compulsory basic insurance) The benefits include: examinations, treatment and care; tests, pharmaceutical drugs and any remedies and devices required for examination or treatment; contributions toward the costs of medically prescribed spa treatments; medical rehabilitation measures; stays in the general ward of a hospital or a semi-inpatient facility; contributions toward the costs of medically required transportation and toward rescue costs. Health insurance under the Insurance Contracts (VVG) A supplementary health insurance can be concluded under the Insurance Contracts (VVG) to cover medical services that are not covered by compulsory health insurance. This enables the insurance coverage, for example, of the cost of alternative health care, emergency treatment in foreign countries, medicines not covered by regular health insurance plans, dental treatment, transport and rescue services, hospitalisation in single or double wards (private/ semi-private), free choice of doctor, domestic help, cosmetic surgery and other benefits. In many areas, such as premium adjustment, period of notice, etc., other rules apply to supplementary health insurance than those that govern compulsory health insurance under the Health Insurance (KVG).