The first payment of the 13th monthly state pension is scheduled for December, but Swiss voters must still approve the source of the money for this expensive project – a hike in VAT. Here’s how it could affect you.
In March 2024, Swiss voters approved a move to pay an extra month’s state pension to retirees.
As the scheme will cost 4.2 billion francs annually for the next four years and 5.4 billion by 2040, the government decided it would be financed by higher Value-Added Tax (VAT).
Concretely, the VAT – the extra charge added to the cost of most purchases, from food and drink to clothing – would increase by 0.4 percent.
It will go up from the current 8.1 to 8.5 percent.
But as this move would require a constitutional amendment, it must win a double majority of both voters and cantons.
A referendum on this matter will be held on November 29th.
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What would this VAT increase mean to you?
According to Frank Marty, a tax expert at the business umbrella organisation Economiesuisse, “in an average household, this means 250 francs more going to VAT per year.”
If your salary exceeds the median wage – 87,000 francs in 2025 – then you will likely contribute 450 francs a year, but only 200 francs if you are low-wage earner (and therefore a lower spender).
READ MORE: How much will the 13th pension payment in Switzerland cost you?
In an interview with RTS broadcaster on October 5th, Elisabeth Baume-Schneider, who heads the Federal Social Insurance Office (OFAS), said that she is “not downplaying the financial impact the higher VAT will have on small households.”
“For low-income households, it matters, she added.”
Baume-Schneider pointed out, however, that “the chosen solution is a good compromise.” as the additional cost will be shared by the entire population – including the retirees themselves.
On the bright side…
If you are concerned that the higher VAT will place a burden on your finances – as this means the already high cost of living will go up further – keep in mind that you will benefit once you retire and will receive the 13th instalment too.
Also, the government believes that the increased VAT is a better option overall than other funding possibilities – for instance, a 0.2-percent in payroll contributions, which would penalise those who are still employed.
What happens if voters turn down the plan to finance the 13 pension through higher VAT?
According to Baume-Schneider, the payment would still be made in December from the state pension coffers, while the government would have to scramble to find alternative sources of financing.
How much will the 13th payment be?
OFAS has announced on September 15th that the average payment will amount to 1,580 francs.
In reality, you will receive your regular monthly amount as the 13th payment.
The1,580-franc figure s an average of a typical AHV/AVS pension received in 2026 by retirees.
For instance, the actual payout will vary depending on the marital status of the beneficiaries, as well as their place of residence.
While the average pension in Switzerland is 1,969 francs a month in 2026, it amounts to only 702 francs for people residing abroad.
That’s because many beneficiaries living in foreign countries had contributed to the Swiss social security system only for part of their working life and have therefore “contribution gaps.”
The amount of the state pension depends primarily on the duration of contribution and average earned income. Individuals who have paid contributions throughout the entire insurance period (44 years) receive a full pension – currently 2,520 francs per month.
READ MORE: Switzerland reveals the average amount of the long-awaited 13-month pension
