Changes to solidaritory premiums planned by end of 2022

Accurity – Newsflash | Swiss Unemployment Insurance

A communication just released by the Swiss State Secretariat for Economic Affairs, SECO, refers to the potential abolition of the so called unemployment solidarity premium. This levy on salary above the limit covered by unemployment insurance was introduced in 2011 to establish a surplus of funds to cover unemployment.

Unemployment insurance (ALV) in Switzerland is mostly financed by social security contributions paid for in equal parts by employers and employees. The amount contributed for this insurance, is 2.2 percent from the annual salary, up to a limit of CHF 148’200.

At the beginning of the millennium the ALV fund was financially unbalanced and heavily indebted. Part of the revision of the Unemployment Insurance Act (AVIG), was a  solidarity contribution which was introduced in 2011. The goal here was to accelerate the reduction of debt from the ALV fund. The solidarity contribution is 1 percent of salary over CHF 148,200. This action meant that the ALV fund received up to CHF 400 million in additional contributions each year.

According to current legal regulation, the solidarity contribution will be levied until the equity capital of the ALV compensation fund exceeds the threshold of 2.5 billion. Current trend figures show that this limit will be reached by the end of 2022. As a result the right to levy the solidarity percentage would automatically cease by law on 1 January 2023. However, as mentioned, the final decision is dependent on the surplus exceeding CHF 2.5 billion on 31. December 2022.