Families in Switzerland are in line to receive higher benefits, thanks to a new proposal approved by the Council of States. The move would create a special childcare subsidy, which would be used to supplement the existing family allowance.

Switzerland moves to offer families new childcare allowance

On December 11, the Council of States approved a plan to provide a new form of benefit to those with young children in Switzerland. With the current system of subsidies set to conclude at the end of 2026, the chamber wants to replace the direct funding of mostly private childcare services with an allowance paid directly to parents.

Under the plans, families would be paid 100 francs per month for every child between the ages of zero and eight who attends childcare one day a week. Payments would increase by 50 francs for every additional half-day a child is in care, meaning families who use childcare throughout the working week would receive 500 francs a month per child.

These benefits would be paid in addition to the family allowance, with disabled children expected to receive more. The relief would only apply to those registered in Switzerland - families with cross-border residence permits would not be covered by the subsidy.

Despite calls by some in parliament, the allowance would be paid by Swiss cantons rather than by the federal government. Indeed, in their latest austerity plans, the Federal Council plans to phase out federal childcare funding entirely, having spent 451 million francs on subsidies since 2003. Instead, government funds will be used to fill gaps in childcare services, rather than providing blanket funding to the whole system.

Swiss lawmakers clash over childcare funding

The allowance itself is a counter-proposal to the Kita Initiative. Submitted by a broad alliance of political parties, if approved the referendum would cap childcare costs to 10 percent of parent’s salary for the duration of their child's care. They argue that making childcare more affordable would allow more people (especially women) to join the workforce, satiating Switzerland’s labour demands and providing relief to the lowest earners.

In June, the Federal Council announced its opposition to the referendum, arguing that it would “result in additional costs running into billions.” “These expenses are unsustainable in view of the looming billion-franc deficits. It shares the view that supplementary childcare must continue to be promoted and that the public sector should provide greater financial relief for parents,” they wrote.

However, with Switzerland sporting the highest childcare costs out of all countries in the OECD, it’s unclear whether the Council of States’ compromise will do much to alleviate higher costs or prevent the referendum's success. The OECD estimates that families in Switzerland spend 26 percent of their income on each full-time place in childcare. A 2021 report from Credit Suisse found that the median cost of childcare in Zurich sits at 127 francs a day.

The Council of States' proposal will now be sent to the National Council for approval.