Expenditure

In Switzerland, expenditure on social benefits is generally on the increase. The social protection system is undergoing changes in line with economic and demographic developments as well as different ways of living. From one year to the next, the variation in social expenditure can also be influenced by fluctuations in the economic situation or in unemployment levels.

Expenditure for social benefits in Switzerland between 1995 and 2022

	1995	2005	2015	2020p	2021p	2022e
CHF billion (at current prices)	85.6	123.9	168.3	206.4	207.3	207.8
CHF billion (at constant prices)	96.1	132	175.1	212	212	207.8
In CHF per capita (at constant prices)	13 700	17 800	21 300	24 600	24 500	23 800

p provisional
e estimated Source: Total social security accounts (TSSA), version 02.07.2023.

In Switzerland

Decline in social expenditure in 2022

In 2022, expenditure on social benefits reached CHF 207.8 billion, a figure down CHF 4.2 billion (-2.0%) on 2021. In 2020, social spending had reached an all-time high, in the context of the COVID-19 pandemic (CHF 212.0 billion). The decline of CHF 4.2 billion on social expenditure between 2021 and 2022 was the result of contrasting trends.

In 2022, social expenditure on unemployment (CHF -7.4 billion) continued on a decline that had begun in 2021, and almost returned to its pre-pandemic level. The main reason for this decline was a change in expenditure on compensatory payments from the unemployment insurance for short-time working and for COVID-19 compensation for loss of earnings.

In the health sector, expenditure on social benefits rose by CHF 2.1 billion, with the rise in compulsory health insurance benefits and the increase in absences from work due to illness. At the same time, benefits linked to screening and vaccination measures returned to almost pre-pandemic levels.

Against the backdrop of the war in Ukraine and the admission of people with S protection status, expenditure on benefits in the field of social exclusion rose by CHF 0.4 billion (+10.5%) compared with 2021.

Benefits by main areas

In 2022, 42.0% of social benefits were paid in the area of old age. The old-age and survivors' insurance (OASI; CHF 43.9 billion) and occupational pension plans (CHF 39.2 billion) together represented the largest share of total old-age benefits (CHF 87.3 billion), in particular in the form of pensions. The OASI and occupation pension plans also cover the majority of benefits paid to survivors, i.e. CHF 8.9 billion of the CHF 9.7 billion spent in this area.

This is followed by expenditure on healthcare (33.0%), mainly paid by health insurers and amounting to CHF 33.4 billion. Next come disability (8.0%), family/children (5.8%) and unemployment benefits (3.2%). The main schemes in these three areas are, in order of expenditure: invalidity insurance (CHF 8.7 billion), family allowances (CHF 6.4 billion) and unemployment insurance (CHF 6.0 billion).

What is meant by “social exclusion not classified elsewhere n.c.e.”?

The “social exclusion n.c.e.” function includes various benefits in cash or in kind, specifically intended for people whose financial, health, dependency or labour market integration difficulties tend to be cumulative or self-perpetuating. This category does not include social benefits that can easily be classified elsewhere. In Switzerland, this function includes most of the expenditure on social assistance, asylum and refugee policies, as well as expenditure on victim support, among other things.

Paid sick leave - benefits from two schemes:

There are two types of paid sick leave: salary continuation (payment of salary in case of illness CO) and daily allowances (health insurance – AMal – and the daily allowance insurance - IPA). These benefits amounted to CHF 12.7 billion in 2022. Complete time series are now available in the "csv" file of the TSSA.

Administrative costs and other expenses:

The total expenditure of the social protection system includes social benefits, administrative costs and other expenditure that ensure the system functions correctly. Social benefits represent around 90% of total social protection expenditure. The administrative costs of some schemes are not included, due to a lack of information.

In Europe

Inflation has reduced the purchasing power of social benefits

Between 2021 and 2022, social benefits expressed at constant prices fell in almost all European countries (median -3.5%). The decline was moderate in Switzerland (-2.0%) and France (-1.8%), but more marked in other neighbouring countries, particularly Austria (-4.9%), Italy (-3.7%) and Germany (-3.6%). Despite these downward trends, social expenditure in Europe in 2022 remained 5.5% (median value) above the pre-pandemic level. In Switzerland, the gap was 6.7%.

Two main effects contributed to the reduction in social benefits in 2022: first, the economic recovery from the COVID-19 crisis continued in 2022, with a consequent reduction in social expenditure on unemployment. Second, the war in Ukraine and the tense situation on the energy and food markets led to an overall price increase, reducing the real value of social benefits paid to households. inflation was particularly high in the countries of Eastern Europe, with double digit values.

Migration flows from Ukraine and other parts of the world are reflected in changes in the social expenditure categories housing and social exclusion. The latter records assistance to the most disadvantaged people, including refugees. Social expenditure on housing and social exclusion surged in comparison with 2021, particularly in many countries in Eastern and Southern Europe, such as Latvia (+80.5%), Portugal (+59.9%) and Czechia (+46.5%). Switzerland also saw a record increase in this expenditure (+4.3% for housing and +10.5% for social exclusion). That being said, social expenditure in these categories remained negligible in relation to total expenditure on social benefits (in Switzerland 3.5% and in Europe 3.0% - median value).

Social benefits help stabilise the economy

In recessionary phases, such as in 2020, economic activity declines by definition and spending on social benefits increases, especially on unemployment benefits. In phases of growth, gross domestic product (GDP) recovers and expenditure on social benefits decreases. An increase in social benefits during recession is important from an economic point of view, as it slows down the reduction in household income and bolsters consumer spending, thus limiting the recession's impact. Against such a backdrop, social expenditure plays a stabilising role for the economy. 

The divide between east and west

In Europe, the governments and social insurances of each country protect the population with various social benefits. Countries' expenditure on these benefits vary according to their economic situation, population health and demographic structure, among others. The countries with the highest social expenditure are found mainly in Northern and Western Europe. In East European countries, expenditure is lower. When the countries' social benefits are expressed as a percentage of GDP, this difference persists, but to a lesser extent.

In 2022, social benefits in Europe were CHF 14 000 in Purchasing Power Standards (CHF PPP) per capita (median value). In European comparison, Switzerland's social expenditure was high (CHF PPP 23 800 per capita), compared with that of other economically prosperous countries such as Austria, Denmark or Germany (CHF PPP 23 600, 23 000 e 22 500 per capita respectively).

Social benefits in Switzerland represented 26.6% of GDP, i.e. 3.4 percentage points more than the European median (23.2% of GDP). As a percentage of GDP, however, social expenditure was higher in Switzerland's neighbouring countries than it was in Switzerland: 32.2% of GDP in France, 29.7% in Austria, 29.6% in Italy and 29.2% in Germany.

How can the level of social expenditure be compared internationally?

To make relevant international comparisons, financial data are expressed:
1) in CHF PPP per capita: Purchasing Power Standards (PPP) are used to offset differences in price levels between countries. By definition in Switzerland, 1 CHF = 1 CHF PPP.
2) as a percentage of gross domestic product (GDP). The percentage share of social benefits in GDP indicates the relative weight of social benefits in relation to the country's economic activity.
The values of these measures are strongly correlated, although the relative position of countries may change depending on the indicator used.

Data quality:

The Total Social Security Accounts (TSSA) are based on the European System of Integrated Social Protection Statistics (ESSPROS) from the Statistical Office of the European Union (Eurostat). The results of the TSSA may differ from those of other related statistics (cf. FSO 2022, TSSA - Overview and main concepts, Neuchâtel). Since 2021, Eurostat has published the main social expenditure indicators in Europe in the consecutive year (T+1) as part of early estimates (early estimates). These estimates are revised and presented in more detail in the following year (T+2). 

Further information

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Other statistics on financial flows of social protection

National figures

Other statistics consider social protection funding in Switzerland from different angles.

• Total social insurance accounts (GRSV): The total social insurance accounts (GRSV) published by the Federal Social Insurance Office (FSIO) gives detailed information on expenditure and receipts for the nine main Swiss social insurances: AVS, AI, PC, PP, AMal, AA, APG, AC and AF.

• The financial statistics of social assistance in a broader sense (FSO): The financial statistics of social assistance in the broader sense (SF) provides an overview of all expenditure on social assistance benefits in the broader sense. These benefits are awarded by the Confederation, the cantons and the communes. The TSPA include these benefits, and as far as possible, use the SF as a source.

• Federal Finance Administration (FFA) financial statistics: the Federal Finance Administration (FFA) also presents the accounts of the Confederation, the cantons, the communes and the social insurances in international comparison.  

International surveys

The following statistics cover certain financial aspects of social security in both Switzerland and in international comparison. More information is available under "Statistical sources and concepts" (available in French, German or Italian).
 

• European system of integrated social protection statistics (ESSPROS)
  The FSO's TSSA are the implementation of the ESSPROS in Switzerland. This statistic is coordinated by Eurostat.

• Social Expenditures Database (SOCX)
  This statistic is compiled by the OECD in cooperation with Eurostat and shows expenditure on social security by the OECD member countries.

• Government expenditure by function
  This statistic is published by the OECD and is based on the IMF's international standards. It enables international comparison of public finances including public expenditure on social security.

• National Accounts
  This statistic shows a country's economic activities based on the European System of National Accounts (ESNA 2010). It can be used to determine the most important cash flows in relation to social security.

• System of Health Accounts (SHA)
  The System of Health Accounts (SHA) is a composite statistic concerning cash flows in the health sector.

Statistical sources and concepts

Surveys

Definitions