Married middle-class couples are at a disadvantage in Switzerland in terms of taxes and pensions. But these disadvantages hardly weigh on the number of divorces. Nor do they diminish respect for the sacred bonds of marriage.
This content was published on May 09, 2022 – 1:13 pm
Committing to a union that should last requires first of all knowing how to calculate well. Before marriage, people wishing to marry in Switzerland must carefully consider the consequences of their act. In some cantons, married couples in which both spouses work, with more or less identical salaries, have to pay more taxes, for example, than if they both continued to live together. This imbalance is called “the penalization of marriage”. About ten years ago, in 2013, the Federal Council counted around 80,000 married couples who suffered from this type of disadvantage. Upon retirement, these couples also have to contend with lower pensions.
Up to 1200 francs less
Simon Tellenbach, pension expert at Zurich-based financial services provider VZ VermögensZentrum, summarizes the puzzle. “Their income is taxed together. For the calculation of the tax are added “. A disturbing situation “for couples who make a living”. Because, he says, more of their income is taken at a higher rate.
In addition, their AHV pensions are limited. “Since they both pay the same old-age insurance contributions after marriage, the pension calculation should be identical a priori. But this is not the case. Married people simply don’t get a pension multiplied by two, ”continues Simon Tellenbach. They are awarded the equivalent of one and a half times the maximum pension to which two people living together in Switzerland are entitled. That is 3,585 francs per month. And here is a ceiling. Two high-income people living together receive AHV twice 2390 francs. Which in the end amounts to a total sum of 4,780 francs.
Wouldn’t the propensity to ask for a divorce therefore be stronger by thinking about one’s finances? Isn’t the heart rather beating towards the wallet in Switzerland? Specializing in family law, the lawyers say no. “In our opinion, it’s a myth,” says Stefanie Althaus, attorney at 4H AG Family Law Experts in Zurich. This AHV pension – also referred to as the first of the three pillars in the country in terms of retirement provision – “is of secondary importance for our clients who are doing well, even very well,” she explains. In addition to their savings, these people have a pension fund, the 2And pillar of foresight.
The fact remains that as retirement approaches, financial considerations could play a role in the decision to divorce. “It is more the fear of aging that encourages not to do it and to preserve the union”, relativizes Stefanie Althaus. For her part, her company never noticed any improvement in the financial situation of the spouses after the divorce.
The age of the breaking of ties
It is the 45-49 year-olds who get divorced the most in Switzerland. In fact, the number of divorces decreases with age. In the 60-64 age group, i.e. at the threshold of retirement, only about 50,000 people divorced between 2015 and 2020. On the other hand, there is an increase of several tens of thousands of divorces in these five years for the group between 30 years and 34 years.
Do older couples have such a romantic view of marriage that they are not ready to divorce for financial reasons? Probably not. Legal obstacles discourage them. “The notion of a common home must have been canceled before the court to release the two pensions”, specifies the Federal Social Insurance Office (OFAS). In summary, it is only from there that divorced couples can receive a higher pension. But they pay a high price for it, one way or another. With the cost of families separated, pension and tax savings disappear. Not to mention the human aspect: finding yourself separated from one day to the next without really wanting it.
SWI Swissinfo.ch has just unearthed a couple who allegedly filed for divorce for purely financial reasons. On the contrary, for pragmatic reasons this time, couples marry shortly before retirement to benefit from numerous benefits. Therefore, in the event of the death of one of the partners, the survivor is entitled to a pension from the old-age and survivors’ insurance. These “surviving spouses,” as marriage laws call them, almost always receive additional support from their pension funds. This is generally not the case with unmarried couples. Another element to take into consideration: cohabitants are fiscally disadvantaged in the event of an inheritance, even if their names appear in the will. We can therefore establish that marriage in Switzerland is similar to a form of coverage.
Marriage and the risk of impoverishment
But there is one exception. If either spouse is in need of long-term care, being married exposes you to impoverishment. “A health disaster,” according to economist and feminist Masha Madörin. In Switzerland, she says, “this financial disaster can also affect the upper middle class”. Her advice: “women should get divorced before retirement”.
Summarizes this distortion. “If my partner is in need of long-term care, it is up to me to bear the financial burden until I answer for anything that may affect all of my property.” The situation is very different after divorce. The pension fund, the common assets and the pension are then split in two. Health bills bind only one person. This situation remains unfavorable for women, as they are generally the ones who pay for their health care costs, not to mention the care they provide to their partner. This is all the more true as “husbands here are on average older than their wives”.
Masha Madörin was in charge of doing the calculations. In Switzerland, 2.3% of the Gross Domestic Product is devoted to long-term care, which corresponds to the European average. But in countries like the Netherlands or Denmark, almost all of these costs are covered by public authorities. Here, it is the individuals who pay the high price. “Relatively, Switzerland is an exception in Europe,” she says. They are relatives who put in their own pocket or become caregivers without being paid.
The calculations between marriage-related tax risks and benefits may very well fall into the water when a serious and unplanned illness occurs within a couple. Masha Madörin also does not know anyone who would have filed for divorce before retirement. On the other hand, it is more common to see cohabitants decide to marry after having lived together for many years. “An oath of fidelity until the end of life”, she summarizes her.
These exceptions do not appear in the figures. Like the divorce statistics, those on marriages do not show noticeable increases in marriages after age 60. In Switzerland, 30-34 year olds get married the most.
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