Family allowances in Switzerland

Family allowances are a social benefit that helps cover the cost of raising children. They concern almost every employer with staff and every family with children, but their administration goes through the family allowance compensation fund (FAK) and follows rules that are partly cantonal. It is worth understanding who pays, who receives and how they are claimed.

What they are

The system provides for two main types of allowance:

• the child allowance, paid for each child up to a certain age;
• the training allowance, of a higher amount, paid for children who continue their studies or training beyond the age for the ordinary allowance and up to a maximum limit.

The minimum amounts are set at federal level, but cantons may provide for higher amounts and, in some cases, supplementary allowances (for example for birth or adoption). This is why the actual figure depends on the relevant canton.

Who is entitled

As a rule, the following are entitled to allowances:

• employees, through their employer;
• the self-employed, registered with a family allowance fund;
• under certain conditions, persons without gainful employment, subject to income thresholds.

The fundamental rule is that the allowance is paid only once per child: two full allowances are not accumulated for the same child. When both parents work, there are priority criteria that establish who has the primary entitlement (for example who carries out a gainful activity, who has parental authority, the child’s place of residence). The other parent may, where applicable, be entitled to a difference if the allowance is higher in their canton.

How the process works

For the employer the mechanism is usually as follows:

1. the employee applies for the allowance by submitting the documentation (family status certificate, training certificates for adult children in education);
2. the employer forwards the application to the family allowance fund it is affiliated with;
3. the fund recognises the entitlement and the amount;
4. the allowance is usually paid with the salary and shown on the payslip, then offset by the employer against the fund.

In practice, the employee sees the allowance arrive together with their salary, while the financial cover comes from the FAK system.

Who pays the contribution

Financing takes place through an FA contribution calculated on the payroll total. For employees this contribution is, as a rule, entirely borne by the employer, and the rates vary from canton to canton and from fund to fund. The self-employed pay their own contribution on their income.

This is a point that is often misunderstood: the allowances do not “come out” of the individual employer’s pocket as an additional cost per child, but are financed by the collective contribution paid to the fund, which then pays out the benefits.

Obligations and points of attention for the employer

• Affiliate with a family allowance fund (often linked to the AVS compensation fund).
• Check the applications and documentation, in particular the training certificates that justify the training allowance.
• State the allowances correctly on the payslip and in the statement.
• Report changes: end of training, transfers, changes in the family situation, which may modify or terminate the entitlement.

Typical mistakes are paying a training allowance beyond the limits, making a double payment for the same child, or failing to adjust when the family situation changes. These are amounts that, if paid wrongly, may be reclaimed.

How we help you

SIH ONE’s Payroll division manages affiliations, family allowance applications and the correct presentation on the payslip, coordinating employer, employee and compensation fund. Entrust us with your payroll.