Pre-pension benefits for older jobless slimmed down

The scheme is limited to about 3,400 beneficiary a year. Keystone / Laurent Gillieron

Parliament has approved plans for pre-pension unemployment payments for older out-of-work Swiss residents.

The social security scheme for those who cannot find gainful employment after the age of 60 seeks to prevent older people from having to claim welfare benefits.

It is targeted at people before they are eligible for payments from old-age pension funds – at the age of 64 for women and 65 for men.

An estimated 3,400 people are likely to receive such unemployment payments at a total cost of CHF150 million ($157 million) a year, according to experts.

The Senate on Wednesday followed the House of Representatives in agreeing a compromise, capping the payments.

Opponents mainly on the right argued the new scheme was too costly and encouraged companies to dismiss their older employees.

However, Interior Minister Alain Berset said financial support for older people who are out of work was “more important than ever”, as the country faces an economic downturn.

The beneficiaries must be resident in Switzerland, they must have made contributions to the social security funds for a minimum of 20 years, and their personal wealth must not be greater than CHF50,000.

It took both chambers of parliament several rounds of debates to hammer out a compromise formula, which is less generous than the government’s initial proposal.

Ahead of vote

The scheme comes as campaigns get underway ahead of a nationwide in September on a proposal by the Swiss People’s Party to scrap the free movement of people agreement with the European Union.

The right-wing party argues immigrants from EU countries put jobs at risk for many domestic workers on the Swiss labour market.

The accord came into force in 2002 and was extended to an increasing number of European countries following several nationwide votes.

In 2014, voters approved immigration curbs from the EU that created tensions with Brussels about future relations and years of political controversies domestically surrounding the application of the restrictions.