What is Social insurance?

Social insurance in Switzerland is a comprehensive system designed to provide financial protection and support to individuals in cases of illness, unemployment, retirement, disability, or other life circumstances. It is mandatory and regulated by the Swiss government, ensuring all residents and workers have access to essential social security benefits.

Key Components of Social Insurance in Switzerland

  1. Old Age and Survivors Insurance (AHV/AVS)
    • Provides pensions for retirees and financial support to survivors of deceased insured persons.
    • Funded through contributions from employees, employers, and the self-employed.
  2. Disability Insurance (IV/AI)
    • Offers financial support and integration measures for individuals unable to work due to disability.
  3. Unemployment Insurance (ALV/AC)
    • Provides income support and reintegration services to individuals who lose their jobs.
  4. Health Insurance
    • Mandatory for all residents, covering basic medical care and hospitalization. Employees and self-employed individuals are required to contribute.
  5. Accident Insurance
    • Covers medical expenses and income loss resulting from workplace or non-workplace accidents. Employers typically cover premiums for work-related accident insurance.
  6. Pension Funds (BVG/LPP)
    • A second pillar of retirement savings, ensuring employees maintain their standard of living after retirement. Contributions are shared between employers and employees.

Importance of Social Insurance

Social insurance promotes economic stability, social equity, and individual well-being. It protects individuals from financial hardships due to unforeseen circumstances and fosters a sense of security in Switzerland’s high-cost environment. Employers, employees, and the self-employed must comply with social insurance obligations to ensure comprehensive coverage and legal compliance.