The 43-year-old woman, who lives in Münchenstein, started to receive welfare payments in 2003 after she was unable to work due to her son being born prematurely and needing constant care, broadcaster SRF reported.
Her marriage subsequently broke down and her ex-husband was unable to pay sufficient alimony, leaving the woman in serious financial difficulties.
She remained on benefits until 2012 when she found a well-paying job earning 6,700 francs a month, according to SRF.
She thought her financial worries were over – until last autumn she received a letter from the commune saying she must repay the 224,866 francs she received in social assistance and demanding she sign an agreement to pay it back in installments of 980 francs a month over 20 years.
Switzerland's welfare system does require social assistance payments to be reimbursed in some circumstances.
However the system is regulated at cantonal level and rules vary from canton to canton. Some cantons only demand repayment if the recipient comes into a large amount of money through an inheritance or a lottery win, or if the situation of financial hardship was the recipient's own fault.
But others, including Basel-Land, also demand repayment if the recipient's economic situation improves due to earned income.
Though cantons are free to set their own rules, the Swiss conference for social welfare assistance (SKOS) recommends that cantons do not seek reimbursement from earned income alone.
Speaking to the broadcaster, Alexander Suter from SKOS said to do so could undermine a person's motivation to get back into work and earn a good salary.
And indeed, the woman in question feels she is being punished for finally getting off welfare and into work, reported SRF.
Her lawyer Pierre Heusser acknowledged that in general welfare benefits do have to be repaid in certain circumstances, but he criticized the way in which the commune of Münchenstein has gone about it in this case.
The commune didn't seek to speak personally with his client about her situation before sending the letter demanding payment, he told SRF.
What's more, the sum demanded probably includes certain contributions that do not have to be reimbursed, and the 20-year period is far too long, he said.
Münchenstein rejects the criticisms and welcomes legal clarification should the woman wish to take her case to the courts, reported SRF.