The “child allowances” for pensioners continue to increase. They receive an average of 770 francs a month per child from the AHV. A reform of these pensions has already been postponed several times.
An average of 770 francs for each child: Retired parents receive child pensions from the AHV.
Last year, 153 children were born in Switzerland whose father was 60 years of age or older. Given the reproductive spirit of today’s young seniors, the word “baby boomers” takes on a whole new meaning. At the turn of the millennium, there were about half as many newborns born to parents in the 60+ category as there are today.
The late joys of fathering are primarily possible thanks to advances in health, life expectancy and prosperity – and, if necessary, Viagra provides assistance. According to the magazine “Wir Eltern”, a 93-year-old was even immortalized as a new father in the federal statistics a few years ago. It has long been known that the number of young parents is increasing as they get older. It is also obvious that, for purely biological reasons, it is almost exclusively men who are still able to have children at this age.
93 percent go to fathers
What is less known is that the general public subsidizes these men relatively generously. The AHV knows so-called “children’s pensions”, which are not actually child’s pensions, but rather something like child allowances for pensioners. Except that they are significantly higher than the allowances that working parents receive. In the majority of the cantons, their rates range between 200 and 250 francs per month per child. For young people in training, it is 250 to 350 francs in most places.
Retired parents who live in Switzerland, on the other hand, receive an average allowance of CHF 770 per child and month from the AHV. The rules are clear: anyone who has reached retirement age and has to look after a child receives a supplement of 40 percent to their regular old-age pension.
The possible range is therefore from 480 to almost 1000 francs per month. Fathers account for 93 percent of the total amount of child pensions. The payments flow at least until the 18th birthday. If the offspring is still in training afterwards, the AHV continues to pay up to a maximum of 25.
The National Council wanted to abolish pensions
AHV expenditure has generally increased rapidly in recent years, but child pensions are swinging upwards. From 2015 to 2021 alone, they increased by a good quarter, to 232 million francs last year. Measured against the total annual AHV expenditure of 47 billion francs, that’s not very much.
But in the coming decades, the financial pressure on the AHV will be so great that even smaller items will be questioned. The AHV 21 reform, which will be voted on on September 25, will only secure the social system for around ten years. The proposal primarily comprises two elements: the retirement age for women should also be 65; and VAT is to be increased in order to provide the AHV with much-needed millions.
Child pensions, on the other hand, are not part of the reform. The Federal Council and Parliament have done their best to avoid overloading the urgent bill. Nevertheless, the additional benefits for senior parents are under political pressure. In 2016, the National Council decided to abolish child pensions in the AHV. However, the Council of States went too fast and demanded further investigations, which is why everything is still the same today.
AHV families can keep up with working people
The number of recipients has continued to rise since then: from 23,700 to 28,400 fathers. At a lower level, a steep increase can also be seen among mothers, from 1,600 to 2,300. The more precise clarifications that the Council of States had requested at the time are now also available. Based on an external study the Federal Social Insurance Office speaks out against a reduction or abolition of child pensions. From his point of view, the services are necessary so that the children in these households have the same chances in life as their peers with younger parents – especially with regard to educational opportunities.
But the differences are big. The study also includes IV pensioners with children whose material situation is worse than that of AHV pensioners with children. In 2019 there were political efforts to reduce child pensions at the IV, but this was also prevented by the Council of States. Bourgeois critics have been warning for years that IV pensioners with several children may have more money available than low-income families thanks to good financial security. The study shows that although there are overlaps, the average income of disability pensioners with children is significantly lower than that of other families (minus 22 percent).
The picture looks different if you compare AHV pensioners with children with working families. Here the differences are not great – sometimes they are reversed. Depending on the age of the children, the median incomes are somewhat higher in one group or the other. What is more striking is how big the economic differences are among pensioner families. The “top” 25 percent of retired parents are clearly better off financially than their working counterparts – thanks in part to child pensions. In the “bottom” quarter things are the other way around.
And the widow’s pension?
Whether the new insights into the situation of the various families will have political consequences will probably be seen at the next AHV debate in Parliament at the earliest. Further measures will soon be necessary to keep the social work in balance in the medium term. The focus should probably be on the discussions about the retirement age and further tax or contribution increases.
In addition, child pensions are likely to become an issue again. Otherwise there is enough to do. In many respects, the AHV still breathes the spirit of earlier decades, when men worked full-time and women took care of the children. This applies above all to widows’ pensions, which are much more generous for women than for men. Even women who have never had children and are looking after themselves can receive widow’s pensions.
At the moment, however, no one is interested in talking about these issues. Everyone is focusing on the allegedly fierce voting campaign for AHV 21 in September. Its outcome should be groundbreaking for the further course of the debates about secure and fair financing of pensions.