The social security system

Where does the money for the social schemes come from?

Social security money usually comes from working people and their employers.

Part of each employee’s salary is deducted every month to replenish the funds of the social insurance schemes.

Money from healthy people pays for the sick. Money from young employees pays for old age insurance.

A large number of people pay for a small group of people who receive assistance.

This is called the solidarity principle.

Social insurance is often compulsory. Each month, part of the employee’s salary is deducted to pay social insurance.

Self-employed people and the unemployed also pay the compulsory part.

Social insurance schemes are all regulated by laws.

Social insurance scheme support people in different ways:

• through pensions: money is paid out every month for years. For example, the OASI pension or the IV pension.
• through daily allowances: money is paid for each day not worked. For example, unemployment insurance.
• supplementary benefits (also known as: SBs): additional money is given to people who do not have enough money to live on.

Insurance schemes pay all or part of the medical costs in the event of illness or accident.

• after retirement (after the age of 65): this is the old age pension scheme (with the OASI, among others),
• in the event of death: husband or wife, and children receive the OASI,
• in the event of disability: if you have a disability and can no longer work, you receive an invalidity insurance (IV) pension,

But also:

• in the event of illness or accident (health and accident insurance),
• in the event of maternity (maternity insurance),
• in the event of unemployment (unemployment insurance),
• when you have children (family allowances).