Social security and health insurance

The coordination rules

The social security of cross-border commuters is governed by the European rules on the coordination of social security systems, which apply between Switzerland and the European Union through Annex II of the free movement agreement. Since 1 April 2012 the relevant instrument is Regulation (EC) No 883/2004 together with its implementing Regulation (EC) No 987/2009.¹ The basic rule is that a person is subject to the legislation of one State only, and that an employed person is subject to the legislation of the State in which the work is performed. A cross-border commuter who lives in Como and works in Lugano is therefore insured in the Swiss old-age and survivors' insurance (AHV/AVS), the disability insurance, the income compensation scheme, the unemployment insurance and the accident insurance, and is a member of the employer's occupational pension fund under the Federal Act on Occupational Retirement, Survivors' and Disability Pension Plans. The contributions are deducted from the salary in the same way as for resident employees.

The commuter acquires rights to Swiss pensions in the same way as a resident. When the commuter retires, the Swiss old-age pension is paid to Italy, and periods of insurance in both States are aggregated for the purpose of entitlement, while each State pays a pension corresponding to its own periods. In occupational pensions a particular rule applies to commuters who leave the Swiss labour market: the mandatory part of the vested benefits cannot be withdrawn in cash if the person remains compulsorily insured for old age, death and disability in an EU or EFTA State, while the extra-mandatory part can be withdrawn.² Swiss family allowances are paid to commuters for children resident in Italy. Law No. 83/2023 excludes these allowances from the Italian income tax base for new cross-border workers.³

Unemployment: a rule under revision

Unemployment insurance is the field in which the position of cross-border commuters differs most from that of other workers. Under Art. 65 of Regulation No 883/2004 a wholly unemployed frontier worker receives unemployment benefits from the State of residence, according to its legislation, even though the contributions were paid in the State of employment. The State of employment reimburses the State of residence the benefits paid during the first three months, or five months if the worker had been employed there for at least twelve of the previous twenty-four months.⁴ An Italian commuter who loses a job in Lugano therefore receives the Italian unemployment benefit, NASpI, which is lower than the Swiss benefit. Law No. 83/2023 provided that for cross-border workers the Italian benefit is to be harmonized with the Swiss level during the first three months, the period that Switzerland reimburses.⁵ The State Secretariat for Economic Affairs (SECO) states that cross-border commuters have paid about CHF 600 million in unemployment insurance contributions since 2018, while Switzerland has reimbursed about CHF 300 million to the States of residence.⁶

The European Union has revised this rule. The revision of Regulation No 883/2004 provides for a change of paradigm: wholly unemployed frontier workers are to register with the employment services of the State of last employment and receive benefits from it, provided they worked there for at least twenty-two consecutive weeks. A political agreement between the European Parliament and the Council was reached in April 2026. SECO reports that the European Parliament approved the revision on 7 July 2026 and the Council on 28 September 2026.⁷ The revised regulation does not apply automatically to Switzerland. It would have to be incorporated into Annex II of the free movement agreement by a decision of the Joint Committee, which requires Switzerland's consent and, depending on the form, approval under domestic procedures that may include a referendum. SECO estimates the additional cost for the Swiss unemployment insurance at between CHF 500 and 800 million a year if the revision were adopted.⁸ For Ticino the change would mean that tens of thousands of Italian residents could register with the cantonal employment offices when they lose their jobs, a prospect that has already entered the political debate on the new package of agreements with the European Union.

Notes

1. Annex II AFMP as amended by Decision No 1/2012 of the Joint Committee of 31 March 2012; Regulation (EC) No 987/2009 of the European Parliament and of the Council of 16 September 2009, OJ L 284, 30.10.2009, p. 1. ↩
2. Federal Act of 17 December 1993 on the Vesting of Occupational Old Age, Survivors' and Invalidity Pension Benefits (Vesting Act, FZG), SR 831.42, Art. 25f, https://www.droit-bilingue.ch/de-it/8/83/831.42-25f-51.html (no cash payment of the mandatory retirement assets if the insured person remains compulsorily insured in an EU or EFTA State). ↩
3. Camera dei deputati, dossier on Law No. 83/2023 (above). ↩
4. State Secretariat for Economic Affairs (SECO), "Il regolamento 883/2004 (UE)", https://www.arbeit.swiss/secoalv/it/home/menue/institutionen-medien/projekte-massnahmen/ revision_eu_verordnung_883_2004.html (reimbursement of three months, extended to five months "se i lavoratori frontalieri disoccupati hanno lavorato nello Stato dell'ultimo impiego negli ultimi 24 mesi per più di 12 mesi"). ↩
5. Camera dei deputati, dossier on Law No. 83/2023 (above). ↩
6. SECO, "Il regolamento 883/2004 (UE)" (above). ↩
7. Ibid.; "Disoccupazione dei frontalieri, cosa cambia con il nuovo regolamento UE", Tio.ch, 2026, https://www.tio.ch/newsblog/valute-e-frontiere/1924087/svizzera-disoccupazione-regolamento-frontalieri-ue-accordo-indennita-residenti (political agreement of 22 April 2026, approval by Coreper on 29 April 2026). ↩
8. SECO, "Il regolamento 883/2004 (UE)" (above). Tio.ch (above) reports an estimate of CHF 600 to 900 million. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of October 2026.