Social security system

Switzerland has a solid and effective social insurance network, providing all persons who live and work here ample cover against risks whose financial consequences they may find hard to face on their own.

The Swiss social security system is organized in five sections:

• Old-age, survivors’ and invalidity insurance (consisting of three pillars)

  • First pillar (compulsory): guarantees benefits to pensioners, the disabled, and survivors

  • Second pillar (compulsory only for citizens on a regular and fixed income in Switzerland): occupational benefit plan

  • Third pillar (optional): savings scheme on a fixed deposit account, subject to tax relief (available exclusively to Swiss residents)

• Insurance for the consequences of an illness and accidents

• Income compensation allowances in the case of maternity

• Unemployment insurance

• Family allowances

The benefits paid out by the various insurance branches are funded primarily on the basis of social security contributions deducted from salary. Employers participate in financing the scheme but do not finance health insurance. Each insured person pays his/her own health insurance premium. The state also participates by co-funding the social security schemes with the exception of the occupational benefit plan.