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Social spending in Switzerland fell by two percent in 2022

Updated at 05 Feb 2024 2:40 pm

Social spending in Switzerland fell by two percent in 2022 compared to the previous year. Social spending was also 3.5% lower on average in most other European countries.

In total, expenditure on social benefits in Switzerland amounted to CHF 207.8 billion in 2022. This was CHF 4.2 billion less than in 2021, as reported by the Federal Statistical Office (FSO) on Monday. The decrease can be explained by the economic recovery following the Covid-19 pandemic and inflation as a result of the war in Ukraine.

Recovery after Corona

As the economy continues to recover from the effects of the Covid-19 pandemic, social spending in the area of unemployment has fallen, the report continued.

According to the FSO, expenditure in this area in Switzerland fell by CHF 7.4 billion after the pandemic due to the decline in short-time working compensation and coronavirus-related loss of earnings compensation. Against the backdrop of the pandemic, social spending reached an all-time high in 2020.

Lower purchasing power of social benefits

In addition, the war in Ukraine and the tense situation on the energy and food markets have led to a general rise in prices (inflation). This has reduced the social benefits paid out to households in real terms. If inflation is higher than the growth in social benefits, this leads to a loss in the purchasing power of social benefits as a component of income, as the FSO reported at the request of the Keystone-SDA news agency.

Despite the downward trend, social spending in Switzerland in 2022 was 6.7% higher than before the Covid-19 pandemic. In Europe, the difference was 6.7 percent.

Rising social expenditure in the healthcare sector

According to the FSO, social spending in the healthcare sector fell in most European countries after the end of the pandemic. In Switzerland, the opposite was the case.

Compared to 2021, social benefits in the healthcare sector would have increased by CHF 2.1 billion (3.2%), the FSO reported. Rising expenditure on compulsory health insurance and increasing absences from work due to illness had influenced expenditure. The sharp decline in services in connection with tests and vaccinations ultimately slowed down the increase in social benefits in the healthcare sector.

According to the FSO, important social benefits in the healthcare sector include the reimbursement of care costs, cantonal hospital subsidies, continued payment of wages in the event of illness, daily allowance insurance and daily allowance benefits from compulsory accident insurance.

Switzerland with higher expenditure

Due to migration from Ukraine and other regions, social benefits in the categories of housing (4.3%) and social exclusion (10.5%) have risen sharply. These were the findings of the FSO's analysis. The latter category also includes support for the most disadvantaged people, including refugees. However, at 3.5%, social expenditure in these areas would only have a marginal impact on overall expenditure.

Compared to other economically successful countries such as Austria, Germany and Denmark, social spending in Switzerland was higher, wrote the FSO. At 26.6 percent of gross domestic product, social benefits in Switzerland were 3.4 percent higher than the European average of 23.2 percent.

©Keystone/SDA

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