Government backs cuts to unemployment scheme

Switzerland’s unemployment insurance scheme is SFr7 billion ($6.67 billion) in debt and must cut benefits and raise employee contributions, the country’s president says.

Doris Leuthard, who also heads the economics ministry, said on Friday the government considers the cost-saving measures as “required, balanced and relevant” and that voters should approve the measure at the polls on September 26.

The Swiss Trade Union Federation disagrees. The group said in a statement that the proposals will lead to job losses for the young and old, while those hoping to get back to work will find no openings.

“She knows perfectly well that the template for reducing costs is going to have negative impacts on the economy and the situation of the unemployed,” the union said.

The proposed cost-cutting measures include reducing benefits “in a targeted manner” to save SFr622 million, Leuthard said. What people pay into the fund would increase from two per cent to 2.2 per cent. There would also be a longer waiting period before receiving benefits.

The government said that it will move ahead with reforms even if people reject the measure at the ballot box. Under the current law the government is allowed to increase contributions by 0.5 per cent, more than double the rate increase being proposed.

The fund fell into debt after officials underestimated the number of unemployed persons. The insurance programme is based on an average of 100,000 people being unemployed. Figures released on Friday show more than 142,000 people are without a job, which is fewer than in months past.

swissinfo.ch and agencies