COVID-19: overview of compensation for loss of earnings

Melanie Imper Manager, Employment Solutions, PwC Switzerland 01 Dec 2020

This blog provides an overview of the «Verordnung über Massnahmen bei Erwerbsausfall im Zusammenhang mit dem Coronavirus» (ordinance on measures concerning loss of earnings due to coronavirus) and the «Kreisschreiben über die Entschädigung bei Massnahmen zur Bekämpfung des Coronavirus – Corona-Erwerbsersatz» (circular on compensation relating to measures to combat coronavirus – compensation for loss of earnings due to coronavirus), neither of which are available in English.
Overview of compensation for loss of earnings due to COVID-19

Since spring 2020, the Federal Council has sought to prevent the rapid spread of COVID-19. To this end, it has implemented a wide range of measures including strict protection concepts, bans on organised events, business closures, limitations of third-party childcare and so on. This has placed companies and self-employed people in various industries under considerable financial strain. To help them navigate this challenging environment, lawmakers have drawn up a number of emergency relief measures including compensation for loss of earnings as a result of the pandemic.

The overview below (as at July 2021) shows the requirements, details and eligibility criteria of the various measures.

Eligibility requirement

Details

Eligible parties

Eligibility period

Loss of third-party childcare

Children up to the age of 12, minors entitled to a supplement for intensive at-home care under invalidity insurance (IV) and young persons up to the age of 20 who attend a special education school

1) Closed schools/child day-care facilities/nursery schools

2) Individual in quarantine

3) Highly vulnerable individuals

Employees, self-employed people and persons insured under the mandatory old-age and survivors’ insurance scheme (OASI) who can prove loss of earnings

1) 17 March 2020 to 31 December 2021

2) 17 March 2020 to 31 December 2021

3) 17 March 2020 to 5 June 2020

Medically or officially mandated quarantine

1) Contact with someone who has tested positive

2) Return from a high-risk country/area

3) Parents of children who are in quarantine

Employees, self-employed people and persons insured under the mandatory old-age and survivors’ insurance scheme (OASI)

1) From 17 March 2020 to 31 December 2021

2) From 17 March 2020 to 5 July 2020

3) From 17 September 2020 to 31 December 2021

Particularly vulnerable persons

Particularly vulnerable persons who cannot or can only partially carry out their work in the home office

Employees and self-employed persons:

Pregnant women or persons with diseases or genetic anomalies according to annex 7 of the Covid Regulation no 3 who cannot be vaccinated for medical reasons.

From 18 January 2021 until resumption of activity, but no later than 31 August 2021 or until the second vaccination.

Pregnant women who are fully vaccinated are not considered «particularly at risk» for 12 months.

Recovered persons are not considered «particularly at risk» for six months from the 11th day of confirmation of infection and are therefore not entitled to compensation.

Ban on organised events

Loss of earnings due to cancelled events; also applies to services that were intended to be provided for or at events.

1) Employees, self-employed people and persons insured under the mandatory old-age and survivors’ insurance scheme (OASI) who can prove loss of earnings

2) Persons in an employer-like position and their assisting spouses/registered partners

1) From 17 March 2020 to 31 December 2021

2) From 17 September 2020 to 31 December 2021

Business closures

Loss of earnings due to restriction or suspension of work

1) Self-employed people

2) persons in an employer-like position and their assisting spouses/registered partners

1) From 17 March 2020 to 31 May 2021 in gastronomy; other sectors: until 31 December 2021, provided there is an official closure by the Federal Council

2) From 17 September 2020 to 31 May 2021 in gastronomy; other sectors: until 31 December 2021, provided there is an official closure by the Federal Council 

Cases of hardship/significant restrictions on employment

No business closure, but directly or indirectly affected by measures

1) Self-employed people

2) Persons in an employer-like position and their assisting spouses/registered partners

1) From 17 March 2020 to 31 December 2021

2) From 17 September 2020 to 31 December 2021

This overview does not cover measures that were suspended due to the temporary relaxation of restrictions and then reintroduced in a later version with retroactive effect. We have also refrained from outlining the detailed eligibility requirements (e. g. level of income for self-employed people) and application process due to the frequency with which these change. Please refer to the most recent version for these. The circular on compensation for measures to combat the coronavirus - corona acquisition replacement (KS CE) Valid from 17 September 2020 | Status: 1 July 2021 | 318.713 d now shows the 17th updated version. It is aimed at the compensation offices. Nevertheless, it can also serve as orientation for eligible persons. The FSIO also posted an «Overview of measures relating to the Corona loss of earnings allowance» (German only) on 15 April 2021.

Amount and duration of compensation

The compensation is paid to entitled persons by the relevant compensation office in the form of daily allowances. These amount to 80% of the average income from employment that was earned prior to commencement of eligibility, up to a maximum of 196 CHF per day. AHV/IV/EO contributions and any ALV contributions are deducted from this figure. The start and end dates for eligibility may differ depending on the reason for it. For example, a maximum of seven days of daily benefits is paid out for persons in quarantine. People who suffer loss of earnings due to the measures are eligible until no later than 30 June 2021. The payments are made monthly in arrears. The payment process via the compensation offices is likely to be complex, particularly for employers, due to the need for coordination. 

Given the current situation, compensation for loss of earnings is an extremely fast-moving topic. We therefore recommend that employers consult the most recent version of the circular or ordinance to ensure they are always up to date with the latest details.

Contact us

Melanie Imper

Melanie Imper

Manager, Employment Solutions, PwC Switzerland

Tel: +41 58 792 28 32