SHARE
COPY LINK
For members

JOBS

How Switzerland wants to cut welfare and boost integration for non-EU citizens

The Swiss government is developing a set of proposals to facilitate greater integration in the employment market for non-EU citizens, while also reducing the amount of money spent on social support payments.

People sit working on their laptops and talking around a wooden table
Switzerland plans to make it easier for foreigners to integrate into the job market, while also reducing social welfare contributions in the longer term. Photo by Brooke Cagle on Unsplash

Non-EU citizens, also known as third-country nationals are significantly more at risk of becoming dependent on social assistance than the Swiss or citizens of EU or EFTA states, the government has said.

To counter this trend, the Federal Council is planning to introduce a series of measures to increase integration in the employment market among this target group and to reduce the increase in social assistance spending by cantons and municipalities.

At the same time, federal authorities also want to include an additional integration criterion in the Federal Law on Foreigners, focusing not only on the primary job / residence seeker, but the entire family as well.

While the focus will be on encouraging foreigners into the employment market, the government has promised no further changes to the existing framework regarding revoking visas for third-country nationals. 

Citizenship: How personal debt could stop you from becoming Swiss

The term ‘third-country national’ is used by the Swiss government to refer to people outside of the EU or Schengen bloc. This term also includes British citizens given the UK has left the EU.

A range of proposals were opened up for consultation on May 26th. The consultation will run until May 3rd, 2022. 

‘Incentives for gainful employment’

The initial proposal seems to focus on providing additional support during a person’s first few years in order to facilitate integration, but reduce long-term support options so that foreigners do not become reliant. 

The Federal Council is seeking to introduce “a deeper support approach for third-country nationals in terms of social assistance during the first three years after being granted a short-stay or residence permit in Switzerland.”

READ MORE: Would you pass a Swiss citizenship test?

The government also wants to better examine how new foreigners are supported by their families when entering Switzerland before a settlement permit is granted. 

Specifically, the Federal Council said it wants to better clarify “whether and how foreigners support the integration of their wife or husband, their registered partner and any minor children and support.”

The government in 2021 expanded the Integration Apprenticeship program (German: Integrationsvorlehre, French: préapprentissage d’intégration) to family members from both EU and non-EU countries. 

READ MORE: The nine most surprising questions on Switzerland’s citizenship exam

Cantons can still revoke residence permits in the event of heavy reliance on social support.

The government also indicated it would not change the current framework for revoking residency permits if a person relies too heavily on social support. 

In a statement, the Federal Council indicated it had conducted an “in-depth examination” and concluded the current regulation is sufficient. 

Pursuant to the existing framework, “the cantons can revoke a settlement permit in the event of permanent and significant receipt of social assistance.”

READ MORE: How applying for social benefits could see your Swiss work permit cancelled

‘Slow down increases in social welfare costs’

As yet, the proposal does not provide specifics about how social welfare spending will be curbed, although it appears that there will be a greater focus on reducing dependence on longer term social support. 

Swiss data shows an increase in the amount of money spent on social assistance over the past decade. 

From 2010 to 2019, the amount of money spent in Switzerland on social assistance as a whole increased from CHF900 million to CHF2.8 billion. 

Note that this refers to all social assistance, not just that spent on non-EU foreigners. 

‘It’s competitive’: Essential advice for how to find a job in Zurich

Foreigners are more reliant on social assistance in Switzerland, with 8.8 percent of non-EU foreigners accessing social assistance compared to 2.3 percent of Swiss. 

EU or EFTA foreigners rely on social assistance at a similar rate to that of Swiss nationals (2.8 percent). 

More information about the program is available here in German and French. 

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

OPINION & ANALYSIS

OPINION: Why Switzerland needs to scrap its fabled 1,000 franc notes

If the Americans can get by with $100 bills, the British manage with £50 and EU citizens now mostly €200, why do the Swiss need such a large denomination? The answer is, they don’t, writes Clare O'Dea, as she explains why it should be binned.

OPINION: Why Switzerland needs to scrap its fabled 1,000 franc notes

The existence of the 1,000-franc note, so blatantly open to misuse, is justified with platitudes about the Swiss liking cash.

Apparently the 1,000-franc note is quite pretty but I can’t say for sure as I’ve never seen or touched one. With the exception of Singapore and Brunei, no other country sees fit to issue such a large-denomination note for the simple reason that it’s not needed for legitimate business.

Financial secrecy is obviously a big part of the appeal of the 1,000-franc note. To say otherwise is not really credible. Cash in this condensed form is anonymous, untraceable, easily transportable, easily concealed.

As Bradley Birkenfeld said in a 2015 CNBC interview, “I mean you could put half a million in your pocket, no problem”. Remember that name? Birkenfeld was the (in)famous UBS whistleblower who exposed the bank’s shady practices to the US authorities in 2007, triggering the dismantling of Swiss banking secrecy.

The Swiss National Bank (SNB) explains that the big note is used as a “store of value” to a considerable degree. What does that mean? The SNB’s own research shows that most people keep less than 1,000 francs in cash at home. Are we talking about storing value under the mattress or in a safe deposit box?  Who does that and for what reason?

Look, I’m sure there are people with 1,000 notes squirrelled around the place who run their finances in a totally clean and honest way. The latest SNB survey on payment methods found that half of the population had been in possession of at least one 1,000-franc note over the previous two years. The note is especially popular among men over the age of 55

But inevitably there are tax evaders, money launderers and other criminals who find the big notes come in very handy. The €500 note was scrapped after 17 years mainly because of its popularity with criminal gangs in the EU and beyond, to the extent that it had become an embarrassment.

The €500 note is still legal tender but no new notes have been issued in the euro zone since 2019, following the decision by the European Central Bank. The move came after serious concerns were expressed by academics, international police agencies and EU finance ministers.

When production of the €500 note officially ceased, the largest denomination note accounted for 20 per cent of the value of all euro notes in circulation. Doesn’t it seem odd that 60 per cent of the value of all francs in circulation are in 1,000-franc notes? That’s 9.4 per cent of all physical notes. Something doesn’t add up.

I have heard people argue that 1,000-franc notes are popular for big expenses, like buying a car or jewellery. Or for paying big bills over the counter at the post office (this I have seen). Rumour has it that farmers like to buy livestock with the purple polymer and paper mix. Each to his own.

But these financial practices are fast becoming dated and are anyway not common enough to explain the volume of 1,000 notes in circulation. Yes, it’s official: cash is no longer king in Switzerland.

As recently as 2017, some 70 per cent of non-recurring payments were made in cash, purchases like clothes, the supermarket shopping, or restaurant meals, according to the SNB survey on payment methods. This had reduced to 43 per cent by 2020, the last time the survey was carried out.

The most recent data on payment behaviour comes from the Swiss Payment Monitor, a joint research project between the University of St. Gallen and the ZHAW Zurich University of Applied Sciences, which reported in August of this year.

The study found that the debit card remains the most frequently used form of payment for face-to-face business (34.8 per cent), followed by cash (33.2). Credit cards are less popular at 16.5 per cent. Meanwhile mobile payments are growing in popularity, increasing share from 1.5 per cent of transactions to 11.2 per cent over the past five years. 

What this boils down to is that people are perfectly adept at paying electronically in all kinds of ways and the role of the 1,000-note in retail or person-to-person purchases is far from essential.

While we’re on the subject of money, this month saw the release of the Credit Suisse Global Wealth Report, in which Switzerland emerged as the world’s richest country. The average wealth of adult residents in this country is 672,508 francs, up 5.4 per cent from the previous year. Assets include stocks and shares, pensions savings, and property.

In case you’re feeling left out, the median wealth per adult in Switzerland is 165,266 francs. That means half of the population possesses less than this amount. The figures are skewed upwards by a smallish number of mega rich individuals, with a little help from the 1.1 million millionaires in Switzerland. My guess is that these two groups have the most use for the 1,000-franc notes.

Reading between the lines, I sense some national pride in the attachment to this world-beating high denomination note. Swiss people like to hold cash – that’s our way. We also like our privacy – so what!

Not to spoil the fun, but all cultures need to be aware that just because they’ve always done something a certain way does not mean the practice has merit and is worth preserving. I recommend taking a long, hard look at the legitimacy of the fabled 1,000-franc note.

SHOW COMMENTS