Where things stand today: the payment has been decided, the financing will be put to the vote.
The popular initiative for a 13th AHV pension was approved on 3 March 2024. The first payment will be made in December 2026 as a supplement to the December pension.1
The 13th AHV pension corresponds to one twelfth of the old-age pensions paid during the year. People who receive an AHV old-age pension in December are entitled to it. This 13th payment still does not apply to IV pensions and survivors’ pensions. Supplementary benefits must not be reduced because of the 13th AHV pension.1
For 2026, with a full contribution period, the minimum AHV old-age pension is CHF 1,260 and the maximum CHF 2,520 per month. For people who receive a pension for the full year, this means that the additional 13th payment is generally in the same range as one monthly pension.2
What is open is no longer whether the payment will be made, but how it will be financed. This was the subject of the political dispute until summer 2026. Several billion francs in additional costs per year must be covered; as early as 2024, the Federal Council assumed that the additional costs would rise to just under 5 billion francs per year by 2030.7
On 19 June 2026, Parliament adopted the bill in the final vote: the standard VAT rate is to rise from 8.1% to 8.5% from 2028 at the earliest, and the special rate for accommodation from 3.8% to 4.0%. The reduced rate remains at 2.6%. Higher payroll contributions are not part of the bill. As the Federal Constitution has to be amended, the people and the cantons will vote on it on 29 November 2026. The additional revenue covers only part of the cost of the 13th AHV pension; there is no additional financing for 2026 and 2027.9,10
The three options on the table until the decision
1. VAT-only solution: This is the simplest political reading: the 13th AHV pension is financed exclusively through higher consumption taxes. The Federal Council originally proposed raising VAT by 0.7 percentage points for this. In April 2026, the National Council committee was sticking to a transitional solution under which VAT would have been raised by 0.5 percentage points, limited until the end of 2033. On 19 June 2026, Parliament decided on an increase of 0.4 percentage points.4,6,7,10
2. Mixed financing from VAT and payroll contributions: The Council of States side considered broader-based financing to be more honest and more sustainable. In February 2026, the compromise line of the responsible Council of States committee was plus 0.4 percentage points of VAT and plus 0.3 percentage points of payroll contributions. Higher payroll contributions are not included in the bill adopted.5,10
3. No definitive special financing in this bill: Politically, it was also conceivable that the 13th AHV pension would be paid as decided, but that the sustainable counter-financing would be postponed to the larger AHV 2030 reform or to a later stabilization. This is not entirely off the table, because the VAT bill covers only part of the cost. On the AHV 2030 reform, the Federal Social Insurance Office (BSV) expressly states that additional financing could become necessary, depending on Parliament’s decision on financing the 13th old-age pension.1,6,8,9
What matters here:
The consultation draft of AHV 2030 does not provide for an increase in the reference age. Instead, the reform focuses on modernization, financing and stronger incentives to keep working beyond the reference age.6
What this means for private individuals and your taxes
For tax purposes, the 13th AHV pension is not a special case outside normal income taxation. According to the guidance of the Swiss Federal Tax Administration (ESTV), AHV pensions are 100% taxable. The 13th AHV pension therefore increases your taxable income in the year it is paid out.3
- With a full maximum pension of CHF 2,520 per month, the annual AHV benefit rises arithmetically from CHF 30,240 to CHF 32,760.
- With a full minimum pension of CHF 1,260 per month, it rises from CHF 15,120 to CHF 16,380.
What matters for tax purposes is therefore not only the monthly pension, but your total annual income including this additional benefit.2,3
For many pensioners, the 13th AHV pension will nevertheless remain noticeably positive on a net basis. But the gross amount does not land in your account one to one and tax-free. Depending on the canton, municipality and your other income, the additional payment can slightly increase the effect of tax progression.
This is not a new special tax, but the normal effect of income taxation on a higher pension amount.3
At the same time, there is an important relief: supplementary benefits are not reduced because of the 13th AHV pension. For people with a small budget, this is crucial, because the additional pension must not be neutralized again through the supplementary benefits.1
The second level concerns the counter-financing. If the people and the cantons approve the VAT increase, you help pay for the additional benefit mainly through consumption. That affects practically all households, including retirees without earned income.
This bill does not provide for higher payroll contributions. They would affect people in work more directly on their payslip, and retirees without earned income less.4,5,10
Who pays how much? The distribution effect of the three options
For private individuals, the important question is not only whether the 13th AHV pension will come, but who bears most of its financing.4,5,8
With a VAT-only solution, as adopted by Parliament, the burden is spread widely across all consumers. This is administratively clear and comparatively easy to explain politically. At the same time, this option is unpleasant for households with a tight budget, because VAT makes everyday life directly more expensive and the relative effect can be felt more strongly at lower incomes.4,10
With mixed financing, the burden is shared between consumption and work. From a system perspective, this is more robust, because it is not only consumption that is burdened. For people in work, however, this solution is more visible, because higher AHV contributions would appear directly on the payslip.5
With a postponement to AHV 2030, there would be less immediate new burden in this particular bill in the short term. The price, however, would be higher political and financial pressure in the next reform round. For private individuals, this means less clarity today and potentially larger or bundled measures tomorrow.1,6,8
Regardless of the financing model, one distribution point remains: everyone who receives an old-age pension benefits from the 13th AHV pension, including people with higher AHV pensions. It is not a targeted instrument against poverty, but a general increase in old-age pensions.1,2,7
Our assessment
Our assessment is clear: Switzerland is no longer debating whether older people should receive an additional AHV payment. That question has been decided politically. The honest debate is now only about who visibly pays the bill.
A VAT-only solution is probably the easiest to sell politically, because it is technically simple and pensioners without earned income see no direct new burden on wages.
In terms of distribution, however, it is the harshest option for everyday life, because it makes consumption more expensive and therefore also affects households that do not benefit from an old-age pension at all, or only much later.
In our view, mixed financing is more convincing from a system perspective. It spreads the burden more broadly across consumption and earned income and does not shift the entire financing one-sidedly into the shopping basket. Politically, it is less attractive, because higher payroll deductions are immediately visible and therefore more contentious.4,5
The third option currently looks weakest: postponing the sustainable financing further to AHV 2030. It may seem convenient in the short term, but it does not solve the underlying problem. An additional benefit that has been decided without clear, lasting counter-financing only increases the pressure for reform later on.1,6,8
For private individuals, the most important practical point is ultimately a different one: treat the 13th AHV pension not as a tax-free bonus, but as a normal taxable pension supplement. This very point is often underestimated in the public debate.3
