Loss of Income Insurance

Hi Experts,

Up until now I believed that I was completely insured against loss of income resulting from sickness. In addition to disability insurance from social security and my pension fund, I am also privately insured and would begin receiving a regular benefit after a 24-month wait.

But what would happen if the social security office only made its decision and began paying my disability pension after 5 years? Would I be able to claim welfare to make up for the missin income until the social security office processed my disability pension claim?

Thank you for your help with this.

Hi there,

As a general rule, any Swiss citizen or permanent resident whose income and wealth fall below the minimum subsitence levels decided on by the Swiss conference on welfare (SKOS) has a right to apply for welfare. If you become disabled and the income which you receive (from accident insurance benefits, for example) is not sufficient to meet at least a minimum subsitence level (as per SKOS), you can apply for welfare subsidies.

However, the exact criteria which determine who is eligible for welfare vary between cantons and individual welfare offices. Requirements for repaying welfare subsidies if your income increases in the future also differ between cantons.

Typically, welfare offices will require that you sign a document which allows them to apply possible disability pensions towards your living expenses. If your income after you begin to receive your disability pensions surpasses certain thresholds, you may be required to repay the welfare subsidies which you received up until that point. However, this too varies between cantons.

Best regards from Moneyguru

More on this topic:
Guide to Swiss accident insurance

Can you tell me whether getting private loss of income insurance (from a private insurance company, not social security) makes financial sense? I will be quitting my current job and taking a long(ish) break from working in order to spend time with relatives overseas.

Hi there,

Loss of income insurance policies are typically based on a percentage of your pre-incident income. For example, the insurance company may pay out a benefit equal to 80% of your salary if you are unexpectedly laid off, or are forced to stop working due to illness or disability. If you are not employed and are not earning an income at the time that you become disabled or otherwise incapable of working, then you will not receive a benefit because there is no loss of income.

It is possible to take out loss of income insurance which pays out a predetermined flat benefit in the event of your becoming disabled, regardless of your income. These policies pay out a lump sum rather than an ongoing pension. Getting this can make sense if you are unemployed or self-employed.

If you are employed, the coverage which you receive between social security disability insurance (DI), your occupational pension fund's disability insurance and your employer's accident insurance generally provides sufficient coverage.

It is worth noting that if you receive unemployment benefits (ALV), you are covered against accidents by SUVA (including loss of income benefits). You also remain covered by the disability insurance provided by your former employer's occupational pension fund for as long as you receive unemployment benefits.

The disability insurance provided by social security remains in place regardless of your employment status, as long as you remain registered with social security.

Best regards from Moneyguru