Supplementary benefits (SB) to the old-age, survivors’ and invalidity insurance ensure an individual’s subsistence level if pension and income do not cover the minimum living costs. From 1 January 2021, however, heirs must reimburse SB under certain circumstances albeit the deceased individual received them legitimately during his lifetime.
1. General Information on Supplementary Benefits
SB are not social welfare benefits but social insurance benefits an individual has a constitutional, unconditional entitlement for if the prerequisites are met.
2. Legal Amendments
With the legal amendments effective from 1 January 2021, an individual is entitled to SB if his net assets amount to less than CHF 100,000. For married couples the threshold is CHF 200,000 (cf. art. 9a of the Federal Law on Supplementary Benefits to Old-Age, Survivors' and Disability Insurance [FLSB]). For the calculation of assets, residential property is not taken into account as long as one of the spouses is living in the property. On the other hand, assets that a person voluntarily renounces e.g. by making a gift/advance inheritance to descendants, are considered. Voluntary renunciation is defined as expenditure of more than ten percent of the assets per year. In the case of a lifetime gift, the entitlement to SB may be forfeited under certain circumstances.
Furthermore, the new articles 16a and 16b FLSB now provide that the heirs must reimburse SB which the deceased lawfully received in the last ten years prior to his death out of the estate provided that the estate exceeds CHF 40,000. The deceased’s date of death is decisive for determining the estate’s value. Any SB paid out after 1 January 2021 must be reimbursed.
For married couples, the reimbursement obligation only arises in the second spouse’s estate if the requirements are still fulfilled.
The reimbursement obligation is presumably an inheritance debt that arises against the heirs after the death of the deceased. The heirs are jointly liable for this debt, i.e. each heir can be made liable individually by the competent compensation office (art. 603 of the Swiss Civil Code [CC]). However, the reimbursement obligation is limited to the estate, i.e. the heirs' private assets are excluded from reimbursement.
However, because there is no solidarity between the heirs themselves, the heir who paid the SB in full or at least more than his quota entitlement to the estate, must lodge a claim for recourse and subrogation against his co-heirs (cf. art. 640 CC).
In principle, a claim for reimbursement of the competent compensation authority is time-barred after one year of the compensation office’s awareness of the claim, but after the expiry of ten years after the payment of the respective SB at the latest.
3. Recommendation
The newly introduced amendments contradict the prevailing principle that lawfully received benefits do not need to be repaid. From an inheritance law perspective, the amendments lead to a complication in the estate administration and increase the need for planning. It is therefore recommended to include this topic in the estate planning.
