AHV contributions: How much do unemployed persons pay?
Unemployed persons are still required to pay AHV contributions. The amount they pay is determined by their assets and any pension income. The minimum AHV contribution is currently CHF 514 per year. Who exactly is considered to be unemployed and how are AHV contributions for married couples calculated?
Even unemployed persons are obligated to pay AHV contributions
Even unemployed persons have to pay AHV contributions. The requirement begins on January 1 of the year in which they turn 21 and ends upon reaching the normal retirement age. Failure to make these payments can result in AHV contribution gaps, which may lead to a pension reduction. To avoid this, it is important to know who is considered to be unemployed and what obligations are associated with that.
Who in Switzerland is considered to be unemployed?
Any person who has only extremely low gainful employment income or has no income at all is classified as unemployed. This includes the following people:
- Travelers who have notified the authorities in their Swiss place of residence that they are away.
- People who have retired early.
- Parents who devote themselves to raising their children full-time.
- Recipients of disability pensions.
- Recipients of daily sickness or accident benefits.
- Unemployed people who have discontinued their insurance benefits.
- Insured people with a very small level of employment (less than CHF 4,851 per year).
- Employed persons who only work a very small amount are also considered to be unemployed. This is the case if their AHV contributions combined with their employer's contributions amount to less than half of the contribution they would have to pay as an unemployed person.
Minimum and maximum contributions for unemployed persons
Starting with the calculated basis for AHV contributions, the table of contributions specifies the AHV contribution owed by unemployed persons annually. There are both minimum and maximum caps on the contributions:
- The minimum contribution to AHV is CHF 514 for people who hold assets of less than CHF 340,000.
- The maximum AHV contribution is CHF 25,700 for people who hold assets of over CHF 8,740,000.
AHV contributions based on assets and income
Other unemployed persons
Based on pension income and assets
Source: Unemployed persons'' contributions to Old-Age and Survivors’ Insurance (OASI), Disability Insurance (DI) and Income Compensation Insurance (IC), published by the Information Center OASI/DI in collaboration with the Federal Social Insurance Office.
Example calculation of AHV contributions owed by unemployed persons
A divorced woman without dependent children and who does not work has an unencumbered property worth CHF 800,000, plus securities and bank balances of CHF 200,000. She receives a monthly alimony of CHF 4,000 from her ex-husband.
Assets (800,000 + 200,000) + pensions (20 × 4,000 x 12)
= 1,000,000 + 960,000
= CHF 1,960,000
According to the table of contributions for unemployed persons, the annual AHV contribution owed by the women is CHF 4,218.80 . The compensation offices additionally charge administrative expense contributions of a maximum of 5% of the contributions.
AHV contributions for married couples and persons living in a registered partnership
For married couples and persons living in a registered partnership, the contributions are calculated based on half of their joint assets, plus half of their joint pension income after multiplying by 20.
= (0.5 x assets) + (0.5 x (20 x pensions))
Unemployed persons that are married or living in a registered partnership are not required to pay their own contributions if their spouse is considered employed for purposes of AHV and pays at least twice the minimum contribution (CHF 1,028 per year).
Insured individuals are responsible for registering as unemployed
It is the responsibility of insured individuals to report their obligation to pay contributions. This means that anyone not already registered with a compensation office to pay their contributions is required to contact the AHV compensation office in their canton of residence or the AHV branch office in their place of residence themselves. As of January 1 of the year in which a person turns 59, this responsibility rests with the Federal Compensation Office (CFC). The same rule applies if the person's last employer was already a member of the CFC.