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A person who has contributed to the OASI system for at least one year is entitled to claim benefits. The OASI also grants collective benefits to private charity organisations, such as Pro Senectute or Spitex, that provide assistance to the elderly.
Individual benefits are as follows:
Men are entitled to old-age pensions from the age of 65 on. Since 1 January 2001 women have been entitled to draw state pensions at the age of 63 and from 2005 on the age limit for entitlement will be 64.
Pensions for married couples
Instead of a single pension for a married couple, each spouse now receives an individual pension. However, the total amount of the two individual pensions may not exceed 150% of the maximum pension, i.e. Fr. 3,315 per month.
In addition to their old-age pension, men and women are entitled to draw a child's pension for each child that would be entitled to an orphan's pension in the case of their death. Children's pensions are paid out to people with children up to the age of 18 (or 25 if they are in full-time education) as well as people who look after foster children without remuneration.
If both parents draw an old-age pension two children's pensions may be claimed. If both pensions together exceed 60% of the maximum old-age pension, i.e. Fr. 1,326 per month, the total amount paid out is reduced.
Children up to the age of 18, or 25 if they are in full-time education, whose mother or father has died are entitled to an orphan's pension which corresponds to 40% of the old-age pension. If both parents have died the orphan may claim two pensions, which together cannot exceed 60% of the old-age pension.
This benefit is for women who have dependent children at the time of their spouse's death. Women without dependent children must be over the age of 45 and have been married for at least 5 years to be entitled to a widow's pension. The widow's pension corresponds to a maximum of 80% of the old-age pension.
Under certain conditions divorced women may also draw a widow's pension.
If a woman is entitled to draw an old-age pension or an invalidity pension in addition to a widow's pension, only the higher pension will be paid out.
This benefit was first introduced with the 10th OASI revision. Widowed men may claim such a pension as long as their children are under the age of 18.
Pensioners may also claim incapacity benefits in addition to their old-age pensions if they can prove a serious or medium incapacity. Incapacity is defined as the need for assistance from a third party for daily activities such as dressing, using the lavatory, eating, etc. The amount paid out as incapacity benefits is not dependent on income or wealth.
The OASI also pays for a range of auxiliary measures or equipment that pensioners need to ensure their mobility, social contact or independence, e.g. prostheses, hearing-aids or orthopaedic footwear.
As a rule the Federal Council adjusts pensions in line with salary and price trends every two years. Pensions are adjusted earlier if annual inflation exceeds 4%. Adjustments are calculated according to the so-called mixed index, which corresponds to the mean salary and price index.
On 1 January 2007 OASI and II were increased by 2.8%.
Type of pension
Monthly pension based on full duration of contribution
as from 1.1.2007
Minimum Fr. 1105.--
Maximum Fr. 2210.--
Minimum Fr. 332.--
Maximum Fr. 663.--
Minimum Fr. 884.--
Maximum Fr. 1768.--
Minimum Fr. 442.--
Maximum Fr. 884.--
Fr. 553.-- for medium incapacity
Fr. 884.-- for serious incapacity
The 10th OASI revision included a new procedure for calculating pensions. This new method has led to a considerable improvement in benefits for those who receive smaller pensions. Minimum and maximum limits have remained unchanged while all pensions based on relevant mean annual incomes between the minimum (Fr. 13,260) and the maximum (Fr. 79,560) have risen.
The OASI is financed through a contribution system. In contrast to occupational pensions or a savings account, the contribution system does not involve life-long savings to amass a certain capital.
Each year, the OASI pays out roughly the same amount as it receives, i.e. within the same financial period the amount it receives in contributions is paid out in benefits. Thanks to this system of financing once increases in pensions have been decided they can be applied immediately.
The benefits paid out by the OASI are mainly financed through the contributions paid by those insured and their employers. The Confederation also contributes 19.55 % of outgoings. It acquires this sum through direct federal and value-added taxes as well as the taxes on tobacco products, alcohol and gambling casinos. Since 1999 the OASI has also been receiving one percentage point of VAT.
In 2007 those insured and their employers paid some Fr. 25.3 billion into the OASI fund. Together with federal contributions, plus various other income, this made it possible to pay out pensions totalling Fr. 33 billion.
Important fluctuations in expenditure are covered by the OASI compensation fund. This fund serves as a reserve for compensation and security. By law the compensation fund must have enough cash to cover one year's insurance benefits.
An individual account (IA) is kept for each person who contributes to the OASI fund. The compensation fund offices enter income, duration of contribution and bonuses for care-taking on each individual account, which is later used for calculating pensions. Insured people contribute to the OASI fund at a rate of 8.4% of annual income, a figure which has remained unchanged since 1975. The employer deducts half of the contribution (4.2%) from the employee's salary and pays it into the compensation fund together with his own share (also 4.2%). For each year that the insured person does not contribute to the system his or her benefits are reduced by approximately 2%.
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