1. Pillar

1)      The old age and survivors insurance, the disability insurance and the supplementary benefits together form Pillar 1 of the Swiss social security system.  Pillar 1 was created for the purpose of guaranteeing a continued existence. Specifically, the old age and survivors insurance replaces at least a large part of income lost due to old age or death. The insurance requirement is built on two assumptions.  The insurance covers all individuals residing in Switzerland, engaged in gainful employment. Therefore, all people who work or live in Switzerland are insured.

The insurance is mandatory from no later than January 1st after the 20th birthday, so far as no occupation has been previously exercised.  The contribution obligation applies to both employed and unemployed persons.

For employees who are not self-employed, the old age and survivors contribution totals 8.4% of the salary and is paid in equal portions by the employee and the employer. A contribution of 7.8% of the income is levied for those who are self-employed.  At lower incomes, the contribution rate drops by up to 4.2%.

There is a special feature regarding the old age and survivors contribution for employers.  To protect workers, legislature has put a special liability for the employer in place, which also applies to bodies, e.g. board of directors of a public company.  In the event of bankruptcy of the employer, verification is executed to ensure that the old age and survivors contributions of the employees were paid correctly. If not, it can result in personal liability of the managing bodies.

2)      Disability insurance (IV) was created initially to lessen and to remove the financial consequences of a health-related reduction of earnings capacity. Disability as well as the old age and survivors insurance are mandatory.  Within the possibilities of disability insurance, people with disabilities are integrated into the labour market and society.  There are various tools available for this purpose.  Principally, contributions to disability insurance are mandatory for those persons who are insured by the old age and survivors insurance.  Just as with the old age and survivors insurance, a total of 1.4% of the salary is paid in equal portions by the employee and the employer.

In principle, the payment of disability pension should only be the last resort, and available as a last resort.  The reintegration of the affected person in the work process is in the foreground.  As already mentioned, there are various measures available.  These include - among many others - e.g. training courses, adaptation of the individual workplace, retraining or additional equipment such as a wheelchair or reading aid.  All these measures should enable a re-entry into working life.

3)      He who provides "service", by which military service, protection or civilian service is understood, has the right to compensation. Contribution is required for those persons who are also obliged to contribute to the old age and survivors insurance.

4)      If the income from Pillar 1 is not sufficient to ensure existence, supplemental benefits may be claimed.  To be eligible for supplemental benefits, economic and personal prerequisites must be fulfilled.  These would be, among others, that the income does not exceed the legally recognised expenditures.

As an example: beneficiaries of supplemental benefits, e.g. the elderly, may be listed for due to an illness, which makes them unable to continue to pay for their own medical care.  In this case, they would be entitled to supplementary benefits.