OASI Benefits and financing

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. 

Benefits

Individual benefits are as follows:

Old-age pensions

Men are entitled to old-age pensions from the age of 65 on. Since 1 January 2005 women have been entitled to draw state pensions at the age of 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. 3,525 per month.

Children's pensions

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. 1,410 per month, the total amount paid out is reduced.

Orphans' pensions

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.

Widows' pensions

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.

Widowers' pensions

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.

Incapacity benefits

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.

Pension adjustments

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 2015 OASI and II were increased by 0.4%.

Type of pension

Monthly pension based on full duration of contribution

 

as from 1.1.2015

Old-age pension

Minimum Fr. 1175.--

Maximum Fr. 2350.--

Additional pension

Minimum Fr. 353.--

Maximum Fr. 705.--

Widow's/widower's pension

Minimum Fr. 940.--

Maximum Fr. 1880.-

Child's/orphan's pension

Minimum Fr. 470.--

Maximum Fr. 940.--

Incapacity benefit

Fr. 235.-- for slight incapacity
Fr. 588.-- for moderate incapacity
Fr. 940.-- for severe incapacity

 

 

On 1 January 2019 OASI and II were increased by 0.9%.

Type of pension

Monthly pension based on full duration of contribution

 

as from 1.1.2019

Old-age pension

Minimum Fr. 1185.--

Maximum Fr. 2370.--

Additional pension

Minimum Fr. 356.--

Maximum Fr. 711.--

Widow's/widower's pension

Minimum Fr. 948.--

Maximum Fr. 1896.--

Child's/orphan's pension

Minimum Fr. 474.--

Maximum Fr. 948.--

Incapacity benefit

Fr. 237.-- for slight incapacity
Fr. 593.-- for moderate incapacity
Fr. 948.-- for severe incapacity
 

 

Procedure for calculating pensions

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 and the maximum have risen.

Financing

Contributions

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.

Finanzierung der Ausgaben der AHV
Graphik Finanzierung der AHV: Beiträge der Versicherten 80,45 %; Beiträge des Bundes 19,55 %

In 2016 those insured and their employers paid some Fr. 30,86 billion into the OASI fund. Together with federal contributions, plus various other income, this made it possible to pay out cash benefits totalling Fr. 42,15 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.

Individual accounts

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%.

Last modification 04.10.2018

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