A pensioner in Thailand: the Swiss People’s Party wants to adjust Swiss pensions paid abroad in countries with a low cost of living to reflect local purchasing power.
Keystone
The right-wing Swiss People’s Party has proposed cutting pensions paid abroad or abolishing them altogether. Another idea is not paying the 13th monthly pension to the Swiss Abroad. With elections a year away, the party is provoking a key group of voters. Now the party leadership is back-tracking, but not much.
So far, the People’s Party has only floated ideas for cutting the cost of state pensions and changing how they are funded. But Swiss citizens living abroad are quick to react when their pensions are at stake.
At the end of August, Swissinfo reported on a parliamentary proposal to exclude recipients abroad from the 13th monthly pension payment. It sparked outrage among the Swiss Abroad.
Anger among Swiss pensioners in Thailand, Brazil and Portugal had barely subsided when the People’s Party made another controversial announcement in September. It proposed adjusting pensions paid abroad to reflect local purchasing power, which would mean steep cuts for some recipients.
The proposal was part of the party’s response to the consultation on “AHV 2030”, the planned reform of the old age and survivors’ insurance system. Once again, Swiss citizens abroad voiced disappointment, anger and bewilderment in comments in Swissinfo debates, on tabloid Blick’s websiteExternal link, on Facebook, and via WhatsApp.
Party President Marcel Dettling: “Many Swiss Abroad like our policies.”
Keystone / Peter Schneider
Now, for the first time, the Swiss People’s Party leadership has spoken to Swissinfo about its ideas to cut spending on pensions paid abroad. “The state pension reform should consider the full range of options,” says party president Marcel Dettling. “We have put forward many proposals, and not all have the same priority.”
Asked whether the party is prepared to risk alienating the Swiss Abroad a year before the elections, Dettling says: “We make policy for Switzerland. There are also many Swiss Abroad who like our policies.”
The party’s campaign manager Manuel Strupler is aware of the anger among the Swiss Abroad. He plays down the proposal to link their pensions to local purchasing power. “It was one proposal among a range of possibilities. But it is not the one we intend to focus on most,” he says.
“It’s not our party’s aim to take away what someone has earned after working all their life in Switzerland and for Switzerland’s prosperity,” Strupler stresses.
Fierce reactions
Inge Schütz, president of the Swiss People’s Party’s international section for party members living abroad, takes a similar view. “From our perspective, the proposal could be implemented in a way that still does not penalise Swiss citizens abroad who have paid contributions for years,” she says.
Despite some fierce reactions on social media, the People’s Party’s international section has heard no complaints. “We’ve received no messages about this, nor has anyone cancelled their membership over it,” Schütz says.
“The party’s main concern is to prevent people from immigrating temporarily, paying into the state pension system for only a few years and then leaving to collect a Swiss state pension abroad,” she adds.
“Pensioners living abroad do not pay tax,” says People’s Party campaign manager Manuel Strupler.
Keystone / Gian Ehrenzeller
Strupler also points out that taxes fund around 20% of the state pension system, alongside payroll contributions. On that basis, he argues, people living in Switzerland contribute more to funding the pension system than the Swiss Abroad. “It’s worth asking whether it’s right for someone to receive a full state pension if they spend none of it in Switzerland, returning nothing through VAT, and paying no other Swiss taxes either,” he says.
Swiss People’s Party parliamentarian Didier Calame makes a similar case for excluding Swiss pensioners abroad from the 13th state pension payment. He argues that the extra payment was intended to help people in Switzerland cope with the rising cost of living and that the pension system is primarily intended for residents. His party did not, however, include Calame’s proposal when it submitted its plans for pension reform.
The party remains adamant about scrapping additional pension payments to people with dependent children. “This system creates incentives for abuse, particularly when benefits are drawn abroad,” it writes. Parliament has been debating the abolition of these payments for some time, and the proposal has support well beyond the Swiss People’s Party. The House of Representatives wants the payments abolished. The Senate has yet to reach a decision.
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Two more of the party’s proposals for pension reform have received little attention. The People’s Party wants changes to Switzerland’s social security agreements with other countries and stricter rules on supplementary benefits.
On social security agreements, the party demands that Switzerland stop signing agreements “that export Swiss pensions without adjusting for purchasing power”. It also wants the Swiss government to renegotiate existing agreements with the aim of “abolishing lifelong pension payments abroad”.
Instead of receiving a pension for life, the party proposes that people moving abroad receive a lump-sum refund of their contributions. It likens the arrangement to the vested-benefits payout under Switzerland’s occupational pension system, which governs what happens to accumulated pension funds when someone leaves an employer. It offers no details on how the scheme would be implemented or what savings it would bring.
Finally, the party also has its eye on supplementary benefits, which top up low pensions to cover basic living costs. People living abroad are not entitled to these payments. Recipients living in Switzerland can, however, spend up to three months a year abroad without losing their benefits.
The Swiss People’s Party now wants to cut the time recipients can spend abroad without losing their benefits to just 30 days a year. The measure would probably affect more foreign nationals who regularly travel between Switzerland and their countries of origin. But the Swiss Abroad could get caught up in the measure’s collateral damage.
Edited by Samuel Jaberg. Adapted from German by David Kelso Kaufher/ts
