Disability Pensions in Switzerland: A Complete Guide

In Switzerland, disability pensions fall into four different categories:

• Social security disability insurance (DI)
• Employment-based accident insurance (UVG)
• Occupational pension funds (BVG)
• Voluntary disability insurance from private insurance companies

These 4 disability insurances all work together to protect your financial life against the possibility of your becoming disabled.

1. Disability pensions from social security disability insurance (DI)

Social disability insurance (DI) covers all residents regardless of their employment status. It also covers eligible cross-border workers. 

Premiums

All residents of Switzerland are required to contribute to the DI scheme. If you are not employed, the DI contribution is included in your compulsory annual OASI/DI social security contribution. If you are employed, you pay a contribution equal to 1.4 percent of your salary, half of which (0.7 percent) is covered by your employer. If you are self-employed, you pay the full 1.4 percent yourself.

Coverage

DI coverage only begins to apply once you have paid DI contributions for three full years. DI coverage ends once you become entitled to receive an OASI old-age pension.

Pensions

If you become disabled, the DI office provides solutions and support to help you remain financially independent if possible. If these measures fail, you can apply for a DI pension. Once approved, you will continue receiving this pension until you become eligible to receive an OASI pension.

The size of your DI pension depends on three factors:

1. The length of time over which you contributed
   
   To be eligible for a full DI pension you must contribute to the DI without fail from the time you turn 21 without any gaps. Young adults between the ages of 17 and 20 pay contributions if they are employed in Switzerland, and contributions over this time can be applied towards possible gaps in the future.
   
   If there are gaps, then you will receive a partial pension instead of a full DI pension. For example, if you moved to Switzerland and began to contribute to the DI at the age of 31, and you became disabled at 41, your pension would be half as high as if you had contributed without gaps from age 21.
2. The size of your contributions
   
   Your average salary before you become disabled determines the size of your disability pension. The higher your pre-disability income is, the higher your DI contributions and the resulting DI pension will be.
   The lowest possible full DI pension is currently 1225 Swiss francs per month. This minimum full pension applies if you paid the minimum DI contributions from age 21 without gaps, and become fully disabled.
   
   The highest possible full DI pension you can get is currently 2450 francs per month. The highest full pension applies if your average annual income ahead of becoming disabled is 86,040 francs or more and you have paid contributions from age 21.
3. Your disability rating
   
   Your disability rating indicates the degree to which a disability impacts your ability to earn income. Eligible healthcare professionals determine disability ratings on behalf of your social security office.
   This chart shows how high your DI pension may be based on your disability rating. These full DI pensions apply if you do not have any gaps in your DI contributions. If you have gaps, you will receive a partial pension which accounts for these. 

If you are Swiss or from a country with which Switzerland has a relevant social security agreement, you can continue receiving your DI pension after moving to another country. The prime requisite is that you are at least 50 percent disabled. If you have a lower disability rating, whether or not you can keep receiving your pension depends on your citizenship and which country you move to.

Supplemental benefits

Because DI pensions can be very low, recipients can apply to receive supplemental benefits. These raise your pension to a level considered adequate to maintain a reasonable standard of living. Whether or not you are eligible for these benefits depends on your combined income and your personal wealth. You can only receive supplemental benefits as long as you live in Switzerland.

Extraordinary DI pensions

Residents who have not contributed to the DI for 3 years may be granted an extraordinary DI pension if they become disabled before the age of 23. You can also receive an extraordinary pension if you become disabled as a result of a birth defect before the age of 20. 

A full extraordinary DI pension for a disability rating of 70 percent or more is 1593 francs per month. For disability ratings between 40 and 69 percent, you receive a percentage of a full pension equal to your disability rating. As with supplemental benefits, you can only receive an extraordinary DI pension as long as you remain resident in Switzerland. 

2. Disability pensions from employment-based accident insurance (UVG)

If you work for a Swiss employer, your employer has to insure you against accidents in the workplace. If you are employed eight hours per week or more, you are also insured against accidents outside of the workplace.

If you become disabled as the result of an accident, you can claim a lifelong UVG disability pension from your employer’s accident insurance. Accident insurance covers the portion of your annual salary which falls below 148,200 francs. If your annual salary is higher than that, the excess portion is not insured.

Like the DI pension, your UVG pension is proportionate to your disability rating. A full UVG pension is equal to 80 percent of your insured salary. That means if you have a disability rating of 70 percent or more, your pension will be 80 percent of up to 148,200 francs.

You are fully insured from the start. The size of your insurance premiums and the length of time over which you paid them have no effect on your pension.

If you receive a DI pension as well, then you can only claim a complimentary UVG pension. This makes up the difference between your DI pension and up to 90 percent of your insured salary.

If you become unemployed, you remain covered by employment-based accident insurance for as long as you receive Swiss unemployment insurance benefits. If you are not employed in Switzerland, do not receive Swiss unemployment benefits, and do not have voluntary interim accident insurance, then you are not insured by UVG and cannot claim a UVG disability pension if an accident leaves you incapacitated. You can learn more about Swiss accident insurance here.

3. Disability pensions from occupational pension funds (BVG)

If you become disabled, you can claim a lifelong disability pension from your occupational pension fund. This pension primarily applies to disabilities resulting from illness because it compliments DI and UVG pensions to make up a maximum of 90 percent of your insured income. Invalidity resulting from accidents is adequately covered by DI and UVG pensions in most cases.

The size of your BVG disability pension is based on the amount of pension benefits you have, and on the number of contributions which would theoretically have been paid up until retirement age (without interest).

Your annual pension is calculated based on your pension fund's conversion rate. Currently, the minimum legal conversion rate for the compulsory portion of your benefits is 6.8 percent.  

Normally you must have a DI disability rating of 40 percent or more to be eligible for a BVG disability pension. Your pension is based on your disability rating:

The legal minimum conversion rate and regulations only apply to compulsory benefits (pillar 2a). Rules and conversion rates for voluntary benefits (pillar 2b) vary between pension funds.

Many pension funds provide additional disability insurance on top of what is legally required and charge an additional insurance premium for this extended coverage. The disability pension you would receive from your pension fund can be found on your annual pension fund statements.

4. Disability pensions from private disability insurance

Most Swiss universal insurance providers and life insurance companies offer voluntary supplemental disability insurance. You can normally choose between pillar 3a (tax-privileged) and pillar 3b (non-tax-privileged) disability insurance.

You choose the full pension for your policy, within the confines of your income and existing disability insurance coverage. The higher the disability pension you choose, the higher the insurance premiums are.

Here too, the actual pension depends on the degree to which your disability reduces your ability to earn income. Some insurance offers have more disability rating thresholds than others.

Disability insurance providers can reject your application. This could happen, for example, if your lifestyle or health status puts you at higher risk of becoming disabled.

Premiums vary between insurers. Some insurers let you exclude unnecessary coverages to lower your premium. If, for example, your employer's accident insurance provides adequate coverage for disabilities resulting from accidents, then insuring this privately is generally unnecessary. Excluding psychological disabilities can also reduce your premium.

As a general rule, insurance policies have waiting periods which apply from the time you become disabled. The rule in this case is: The shorter the waiting period, the higher the insurance premiums.

Do I need private disability insurance for accidents?

Swiss employer-based accident insurance (UVG) provides relatively good loss-of-income coverage for disabilities resulting from accidents. Together with your DI pension, up to 90 percent of your income is covered.

Getting additional disability insurance for accidents only makes sense if:

• You absolutely need 100 percent of your income.
• Your actual income is higher than the maximum insurable salary (148,200 francs).
• You are self-employed and do not have an occupational accident insurance and pension fund.
• You would not qualify for DI supplemental benefits. This also applies if you want to leave Switzerland in the future, because you stop receiving supplemental benefits when you move abroad.

If you are not employed and do not have an income (as a homemaker, for example), getting disability insurance primarily makes sense if:

• You would not be eligible for DI supplemental benefits.
• You plan to move abroad.
• You will need hired services to do jobs which you could not do after becoming disabled (cleaning or gardening, for example).

Do I need private disability insurance for illnesses?

In most cases, private disability insurance is not worth it. If you are permanently settled in Switzerland, do not have a high income, and have relatively little personal wealth, your DI pension plus supplementary benefits may adequately cover you against loss of income. 

If you have a higher income, then your DI and BVG pensions alone generally are not sufficient. An exception to this rule is if your occupational pension fund provides full disability insurance in addition to the legal minimum.

Getting private disability insurance for illness-based disability is worth considering if:

• Your actual income is substantially higher than your combined DI and BVG pensions.

• You would not qualify for DI supplemental benefits or you plan to leave Switzerland in the future.

• Your occupational pension fund (BVG) only provides compulsory disability benefits (no additional disability insurance).

• You are self-employed and do not participate in a pension fund.

More on this topic:
Swiss unemployment insurance guide
Swiss accident insurance guide
Swiss term life insurance comparison