22 September 2021

New support for older unemployed persons: Transition Benefits

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Transition Benefits: Federal Act and Ordinance enter into force.

New support for older unemployed persons: Transition Benefits

At its meeting on 11 June, the Federal Council decided to bring the new Federal Act and Ordinance on Transition Benefits (”TB”) for Older Unemployed Persons into force on July 1, 2021. Unemployed persons who have lost their job after the age of 58 and are excluded from unemployment insurance after the age of 60 can now apply for a transition pension instead of social assistance until they retire. The TB thus serve to improve social security for the unemployed before retirement. The TB are financed by the Confederation and paid out by the cantons. They consist of annual benefits, which are paid out monthly, as well as compensation for illness and disability costs. This article provides an overview of the requirements for receiving TB, how high they can be and how they are calculated.

When am I entitled to Transition Benefits and when am I not?

The TB for older unemployed is aimed at people who

  • at the earliest in the month in which they reach the age of 60 are disqualified;
  • have been insured under the Swiss old-age and survivors' insurance scheme (OASI/AHV) for at least 20 years, including at least five years after their 50th birthday;
  • have earned a minimum annual income of at least 75% of the OASI maximum (CHF 21’510, status 2021) or have education and care credits;
  • are domiciled and actually reside in Switzerland or in a member state of the EU or EFTA; and
  • have recognized expenses that exceed their eligible income (economic condition).

In addition, only those who have assets of less than CHF 50’000 (single persons) or CHF 100’000 (married couples) will receive a TB; owner-occupied properties are not taken into account, but occupational pension assets that exceed a certain amount (CHF 505’700, status 2021) are.

Persons do not receive TB if they

  • have a claim to an OASI or Invalidity Insurance (II/IV) pension;
  • are paid out before their 60th birthday;
  • were disqualified before July 1, 2021.

How much are Transition Benefits and how are they calculated?

TB consist of the annual transition benefit and the reimbursement of illness and disability costs. They are determined according to need and paid up to a maximum annual amount of CHF 44’123 for a single person or CHF 66’184 for married couples (so-called ceiling for TB). Sickness and disability costs are reimbursed annually up to a maximum amount of CHF 5’000 for single persons or CHF 10’000 for married couples, provided that the maximum amount of TB is not reached.

The calculation of the supplementary allowance is based on the calculation of the supplementary benefits. The amount of the TB corresponds to the difference between the recognized expenses and the eligible income.

The implementing authority for supplementary benefits to OASI/II will now also be responsible for the payment of TB.

Our team of social security and labor law experts will be happy to assist you with any clarifications you may need in the context of the transition benefits for older unemployed persons. Further important information on this topic can be found on the website of the Federal Social Insurance Office and in the information sheet of the OASI/II Information Office.