Following its approval at a referendum back in March, lawmakers in Switzerland have now approved the 13th month of AHV pension. Here’s what you need to know about the new benefit, who will receive it and when it will be paid out.

13th month of AHV greenlit by Swiss parliament: Your questions answered

At a vote on December 4, the Council of States unanimously approved the 13th month of first pillar pension in Switzerland (AHV / OASI). This follows the poll on March 3, when 58 percent of voters approved the proposal submitted by the Swiss Trade Union Federation.

With both chambers of parliament now approving the policy, the new branch of social security will be rolled out to the public. Here’s all you need to know about the 13th month of AHV pension:

Swiss first pillar pensions (AHV / OASI)

The AHV or first pillar is a mandatory pension scheme to which all residents of Switzerland must contribute until they reach the statutory retirement age. The amount paid into the scheme is typically calculated as a certain percentage of salary or freelance earnings, although those claiming unemployment benefits or welfare still have to pay a set amount each year. 

How much are AHV benefits?

As the AHV is mandatory, all residents of Switzerland whether citizens or not will receive benefits from the scheme once they retire. As a consequence, everyone over the age of 65 years old who lives in the alpine nation will benefit from the 13th month of pension.

As of January 2025, single retirees will receive somewhere between 1.260 and 2.520 francs a month as part of their AHV, while couples who are married will receive up to 3.780 francs a month. How much you receive is based on how much you earned while you were working, and how long you paid into the system.

What is the 13th month of AHV?

The 13th month of AHV is designed in a similar way to the 13th month of salary offered by some jobs in Switzerland. This policy doubles pay packets for one month, typically at the end of the year.

Who will receive a 13th month of pension?

Everyone claiming their first pillar in Switzerland will receive a 13th month of AHV, a payment which will be worth 8,3 percent of their typical yearly pension. The Swiss government has confirmed that rather than increasing each month’s pension slightly, they will instead pay the 13th month out as a lump sum every December.

"It will have more effect and the solution is simpler," noted FDP State Councillor Damian Müller. The benefits will be paid out automatically.

Will my higher pension income impact my other benefits?

Minister for Social Insurance Elisabeth Baume-Schneider (SP) confirmed that the 13th month of AHV will not be taken into account when calculating other social security schemes. This means pensioners will not receive lower alternative benefits thanks to having a higher pension income. 

When will the 13th month of pension be paid out?

Following the vote, officials confirmed that the very first 13th month of AHV will be paid out in December 2026.

Who will pay for the 13th month of AHV in Switzerland?

While the new benefit will be paid out, lawmakers have failed to agree on how the 13th month of AHV will be funded. Official estimates suggest that it will cost 4,2 billion francs every year, the majority of which will be paid for by Swiss cantons.

In order to pay for the programme, the Federal Council has proposed an increase in value-added tax (VAT). This would see the standard rate of VAT rise from 8,1 to 8,8 percent, while the reduced rate (used on goods like water, foodstuffs and books) would go from 2,6 to 2,8 percent.

Swiss parliament divided over pension funding

However, the Council of States delayed deciding on whether to raise VAT to pay for the 13th month of AHV. Centre State Councillor Erich Etttlin told Watson that they don’t feel the change is urgent, given that the AHV fund is only projected to fall into deficit in 2029. 

Therefore, they argued parliament should more thoroughly analyse how to fund the programme at sessions next year. "We are taking responsibility. And we will provide funding," Ettlin assured.