Individuals who lose their job a few years before retirement often find themselves in a tricky situation. Their chances of re-entering the employment market are slim. If they are unable to find a job and reach the end of their unemployment benefit entitlement, they have to draw on their assets, bring forward payment of their OASI (AHV) pension and often even dip into their second and third pillar retirement assets before becoming eligible for social assistance.
To improve the employability of older adults and encourage the potential of the workforce in Switzerland, the Federal Council and social partners agreed a series of measures in 2019: free skills assessment, analysis of potential and career counselling for individuals aged over 40; recognition of specific professional skills in initial professional training; additional reintegration measures such as coaching, advice and mentoring; access for unemployed persons aged 50 or over who have reached the end of their benefit entitlement to training or employment measures from regional employment offices without a two-year waiting period. If these professional reintegration measures are unsuccessful, payment of the new transition benefits should enable a secure transition to retirement.
The new Federal Act on Transition Benefits for Older Unemployed Persons was adopted by Parliament on 19 June 2020 as a supplement to the measures taken by the Confederation to promote employment of older workers. It enters into force on 1 July 2021. Application forms will be available shortly before implementation.
Eligibility conditions for transition benefits
Transition benefits are being introduced for individuals aged 60 or over who have exhausted their unemployment benefits.
The following conditions must be met to be entitled to transition benefits:
- To have reached the end of entitlement to unemployment benefits after having turned 60;
- To have been covered by the OASI scheme for at least 20 years, of which at least five years after the age of 50, and have earned annual income from gainful employment of at least 75% of the maximum amount of the OASI retirement pension or be able to claim credits for care and education corresponding to OASI;
- To not be entitled to receive an OASI retirement pension or an invalidity pension (DI/IV);
- To not have assets in excess of CHF 50,000 for a single person or CHF 100,000 for a married couple (property serving as the primary residence of the owner is not taken into account).
Individuals who reach the end of their entitlement to unemployment benefit before 1 January 2021 are not entitled to transition benefits.
As a rule, the benefits are paid until normal retirement age. However, individuals who are likely to receive supplementary benefits (EL/PC) at normal retirement age lose their entitlement to transition benefits when they become able to draw their retirement pension early.
Calculation of transition benefits
Transition benefits are means-tested. They comprise the annual transition benefit and reimbursement of sickness and disability costs. The annual transition benefit is calculated in the same way as a supplementary benefit, i.e. the amount corresponds to the share of admissible expenses that exceeds the income applied to determine the rate.
Transition benefits (including reimbursement of sickness and disability costs) are limited to 2.25x the amount intended to cover essential needs provided in the supplementary benefit:
► Single person: a maximum of CHF 44,123 / year (19,610 [essential needs] x 2.25) (Figures 2021)
► Couple / single person with child: a maximum of CHF 66,184 / year (29,415 [essential needs] x 2.25) (Figures 2021)
Last modification 14.06.2021