Top earners face ‘solidarity tax’ for UI

Wage earners with annual salaries of more than 315,000 francs face paying a one percent solidarity tax to help fund Switzerland’s unemployment insurance system starting in 2014.

The federal cabinet issued the proposal on Wednesday as the government sought ways to reduce debt in the insurance system, currently 5.6 billion francs in the red.

A solidarity tax of one percent is currently levied on salaries between 126,000 and 315,000 francs.

By lifting the cap the government expects to raise an extra 90 million francs a year.

The new tax would remain in place until the jobless insurance debt is retired and a level of working capital of 500 million francs is achieved.

This would likely take 10 to 15 years, Dòra Makausz, a spokeswoman for the state secretariat for the economy (Seco) told the ATS news service.

Debt in the insurance system is currently being reduced at a level of 400 million francs a year, while lower unemployment levels are also expected to reduce expenditures.

The current solidarity tax is netting the government 180-190 million francs annually.

The government is accepting feedback on its proposal, which appears to be backed by the two houses of parliament, until January.

Jobless insurance deductions equivalent to 2.2 percent of salaries are applicable to wage earners making less than 126,000 francs a year, with the cost of premiums shared 50-50 between employers and employees.

Wages above this amount are not covered by the national insurance scheme.

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