Swiss Unemployment Insurance Guide

In Switzerland, basic unemployment insurance (ALV/AC) is part of social security. This compulsory unemployment insurance scheme provides a first line of protection against loss of income.

1. Who has to participate in Swiss social unemployment insurance?

• All employees of Swiss employers who earn a gross annual salary of 2300 Swiss francs or more. Domestic employees and artists have to participate regardless of how much they earn. People with considerable influence over the company (position as employer) must pay the premiums, but cannot claim benefits if they retain their influence after losing their employment. 

• Employees of foreign employers that are not subject to Swiss social security contributions (ANobAG).

2. Who cannot participate in social unemployment insurance?

• Self-employed individuals.
• Agricultural workers employed by family members.
• People who have reached retirement age (65 years old), even if they remain employed.

3. How much does Swiss social unemployment insurance cost?

Premiums for mandatory Swiss unemployment insurance are equal to 2.2 percent of the portion of your gross annual salary which falls under 148,200 Swiss francs.

4. Who pays the unemployment insurance premium?

You pay half of your insurance premium yourself, with your share generally being deducted directly from your salary. The other half is paid by your employer. If you are employed by a foreign employer (ANobAG), you must pay the full unemployment insurance premiums yourself.

5. What requirements must I meet in order to claim unemployment benefits?

In order to be eligible to claim Swiss social unemployment benefits, you must meet both of these requirements:

• You have to earn an average gross monthly salary of at least 500 francs before becoming unemployed.
• You have to contribute to the Swiss social unemployment insurance scheme for at least 12 months out of the 24 months leading up to your claim. If you have raised children under the age of 10 years old, the minimum requirement is 12 months over the 4 years preceding your claim (this term is extended by up to 2 years per additional birth).

In these exceptional cases, you remain covered by unemployment insurance for up to 12 months without paying premiums:

• You are unable to work due to pregnancy.
• An accident, illness or psychiatric care prevents you from working.
• You are studying and your studies prevent you from working, if you have been resident in Switzerland for at least 10 consecutive years.
• You are a Swiss citizen and are temporarily living abroad in a country which is not an EFTA or EU member.

6. How do I claim unemployment insurance benefits?

You can claim benefits by registering as unemployed with either your municipal government or your regional job distribution office (RAV/ORP).

7. Do I have to fulfill any obligations in order to keep receiving benefits?

You can only receive unemployment benefits if you are willing to accept new employment.

Once you register, you must fulfill the obligations which the unemployment office sets out in order to receive benefits. Obligations may include: 

• Sending out a minimum number of job applications per month.
• Attending continuing education.
• Taking part in programs aimed at improving your employability.

You must accept jobs that you are offered unless: 

• The salary is less than 70 percent of your last salary.
• You have health problems that are incompatible with the job.
• The commuting distance is excessively long. A commuting time longer than two hours each way is generally considered excessive.

It is largely up to the job distribution office to decide whether or not these exceptions apply to you. You have the right to dispute their decisions.

8. How much money will I get from unemployment insurance?

The standard unemployment benefit is equal to 70 percent of the portion of your last salary which falls below 12,350 francs per month (148,200 per year).

You can claim a benefit equal to 80 percent of the eligible portion of your last salary in these cases:

• You have dependent children.
• You receive a pension from Swiss social disability insurance (DI) and have a disability rating of at least 40 percent.
• Your last monthly salary was 3,797 francs or less.

Benefits are based on your average salary over either the past 6 or 12 months of your employment (whichever is more favorable for you).

9. Can I also claim benefits for reduced working hours?

In addition to claiming benefits for full loss of employment, you can also claim unemployment benefits when your employment hours are reduced by at least 20 percent per week. In this case, you receive 70 percent (or 80 percent) of the lost portion of your salary.

Note: This is not the same thing as compensation for temporary work reductions (KAE), which is separate from unemployment insurance.

10. How long can I receive unemployment benefits?

The maximum length of time over which you can receive unemployment benefits depends on how long you paid premiums over the 24 months leading up to your becoming unemployed:

You can receive unemployment benefits for up to 120 additional work days if you become unemployed within the 4 years leading up to OASI retirement age.

Waiting periods of between 0 and 20 days apply before your benefit entitlement begins. The length of waiting periods depends on your income and whether or not you have dependents.

11. When do penalty periods apply?

A penalty period normally applies when you quit your job rather than being let go. You do not receive benefits until the end of this period. The unemployment insurance office decides how long this period should be. The minimum penalty is 1 day, the maximum is 60 days.

In some cases, penalty periods can also apply when you are let go, depending on the circumstances under which you lost your job. You have the right to dispute penalties imposed by the unemployment office.

Penalty periods can also be imposed throughout the benefit term as punishments for not fulfilling ongoing requirements (see point 7).

12. Can I continue receiving benefits if I move abroad to look for work?

You generally only receive benefits as long as you remain a legal resident of Switzerland, but there are exceptions to this rule:

• If you are a Swiss citizen, you can live in EFTA or EU countries to look for work for up to 3 months and receive Swiss unemployment benefits during that time. 
• If you are a citizen of an EFTA country and you move from Switzerland to an EFTA member country, you can continue to receive Swiss unemployment insurance benefits for up to 3 months after moving. The same applies to EU citizens who move to EU member countries.

In every case, you must be registered as unemployed in Switzerland for at least 4 weeks before you leave the country. With the exception of EFTA citizens moving to Liechtenstein to look for work, you have to apply for and receive a PD U2 certificate from the Swiss unemployment office ahead of your move.

After moving, you must register with the relevant job distribution office in the country you move to and present the PD U2 certificate. As long as you register within 7 days, you will not miss out on any unemployment benefits. You receive the same benefits you would receive if you lived in Switzerland. You have to continue submitting reports to the Swiss unemployment office during your stay abroad. During the 3-month period abroad, you remain covered by Swiss accident insurance and Swiss compulsory health insurance.

If you return to Switzerland within 3 months, you can register with a Swiss unemployment office and continue to receive unemployment benefits until your entitlement period expires. You are only entitled to unemployment benefits from the time you register with the Swiss unemployment office, so it is beneficial to register as soon as possible after returning to Switzerland.

Cross-border workers must apply for unemployment benefits in their home country when their employment in Switzerland ends. However, as a cross-border worker, you can register with a Swiss job distribution office to receive support in finding new employment in Switzerland.

13. How does unemployment impact my Swiss social security?

You have to continue paying contributions for Old Age and Survivors’ Insurance (OASI), Disability Insurance (DI), and military and parental leave compensation (EO/MSE) after becoming unemployed. Your premiums are based on your unemployment benefit rather than on your previous salary. The unemployment insurance office covers half of the contributions. The other half is deducted from your unemployment benefits. 

The unemployment insurance office also takes out accident insurance on your behalf and covers a portion of the premium equal to 1.23 percent of your unemployment benefits. The remainder of the premium – equal to 2.47 percent of your unemployment benefits – is deducted directly from your unemployment benefit.

14. How does unemployment affect my pension fund?

When you become unemployed, you can no longer participate in your former employer’s pension fund.

The compulsory disability insurance and survivor’s insurance which you receive from your pension fund are automatically transferred to the Substitute Occupational Benefits Institution. You remain covered for as long as you receive unemployment benefits. The cost of insurance premiums is split between you and the unemployment office.

You can have your pension fund benefits transferred to a vested benefits account, a retirement fund for vested benefits, or a digital retirement asset management service. Your benefits remain vested until you either become employed in Switzerland again, reach retirement age, or meet the criteria for withdrawing vested benefits early. You cannot contribute to your benefits while they are vested.

After you become employed by a Swiss company again, you can close the gaps in your pension benefits by making extra, voluntary contributions to your new employer's occupational pension fund.

If you want to continue contributing to your occupational pension fund benefits while you are unemployed (to claim tax deductions, for example), you have the option of subscribing to a voluntary plan from the Substitute Occupational Benefits Institution within 30 days of becoming unemployed. This institution also gives you the option of voluntarily maintaining the disability and survivors’ insurance that you received from your last occupational pension fund. You must cover the full contributions yourself, and the pension plan pays interest on benefits at the minimum legally required interest rate.

15. Can I claim unemployment insurance if I am new in Switzerland?

Swiss citizens can claim Swiss unemployment insurance benefits after moving to Switzerland from a non-EU/EFTA country in which they were employed for at least 12 months over the preceding 2 years. If you do not meet these criteria, you cannot claim benefits until you have contributed for a minimum of 12 months.

As an unemployed person moving to Switzerland from an EU/EFTA country, you can only claim Swiss unemployment benefits if you meet the criteria listed under point 5. However, you can apply to continue receiving unemployment benefits from the EU/EFTA country which you are leaving before you move to Switzerland. This is done by obtaining a PD U2 certificate from the unemployment office in your current country of residence. Depending on the country you receive benefits from, you can continue getting unemployment money for 3 to 6 months after moving to Switzerland.

16. Can I get additional unemployment insurance?

Supplementary unemployment insurance offers from private Swiss insurance companies do exist (the Income Protect offer from Helvetia is one example). If you want to insure your entire salary, then using private insurance to close the gap which is not covered by social unemployment insurance could be a consideration.

Note that private terms and conditions may be different from social unemployment insurance. For example, private insurance may only cover full loss of employment and not work hour reductions. Premiums are relatively high, so it is important to compare the total costs with the total benefits you could claim. You can do this with the insurance calculator from moneyland.ch.

More on this topic:
Swiss reduced working hours compensation explained
Swiss accident insurance explained
Swiss disability insurance exlained
Cross-border workers in Switzerland: A financial guide