Federal Council extends income replacement and border crossing ordinances

Brigitte Zulauf Leader Treuhand/Corporate Support Services Switzerland, PwC Switzerland 08 May 2020

At its meeting of 16 April 2020, the Federal Council decided to further extend the replacement income as part of its measures to protect against COVID-19. It also addressed the issue of travel to and from Switzerland.

In our «Update on short-time work compensation and continued salary payment: what employers need to know», we already discussed compensation for loss of earnings. On 22 April 2020, the Federal Council announced the initial relaxation of protective measures to combat COVID-19, with many self-employed persons allowed to reopen their businesses on 27 April 2020 and 11 May 2020.

Care of children and young people

Under the last ordinance, only parents with children under the age of 12 were entitled to payments. This was insufficient for parents who have older children with disabilities. The Federal Council has now raised the age limit to 20 years in such cases and has increased the number of daily allowances. To qualify, the young person in question must attend a special school or receive a disability (IV) intensive care allowance. The special school or integration centre must be closed because of the measures to combat COVID-19.

For young people who receive integrative education in a regular school and do not receive an intensive care allowance, the entitlement is valid until the age of 12. It applies from the fourth day on which all eligibility conditions are met, but not before 19 March 2020, and ends when the measures are lifted. Self-employed parents are entitled to a maximum of 30 days of daily allowance due to the loss of out-of-home childcare.

Self-employed persons indirectly affected by protective measures

Up to now, the entitlement to compensation only applied to self-employed persons in occupations where work was officially prohibited by the authorities in order to combat COVID-19. Self-employed persons who were not directly affected and who were allowed to carry out their work were previously not entitled to compensation. Such persons include taxi drivers, for example. This situation had the potential to endanger the livelihoods of those affected, so the Federal Council decided that these persons should also receive compensation for loss of earnings if they have less or no work as a result of the measures and if their income subject to AHV contributions was between 10,001 CHF and 90,000 CHF in 2019. If these criteria are met, an affected person may claim compensation retroactively from the first day of lost earnings, but no earlier than 17 March 2020. The entitlement expires after two months, at the latest when the COVID-19 protective measures are lifted.

As part of the gradual easing of measures, many self-employed persons are allowed to reopen their businesses starting on 27 April 2020 and 11 May 2020. Under the ordinance, their entitlement would cease at that point. As they are unlikely to be fully booked from their first day of reopening, due to the hygiene and social distancing rules, the Federal Council has extended the entitlement to 16 May 2020. The social security offices will automatically implement this extension for current recipients. In all other cases where there is an entitlement to COVID-19 income replacement, nothing will change at present. If any benefits are obtained unlawfully, the social security office can demand repayment. The maximum daily allowance is 196 CHF or 5880 CHF per month.

Travel to and from Switzerland

In mid-March, temporary border controls and entry bans were introduced due to COVID-19 to protect the health of the Swiss population. People are generally advised to avoid all non-essential travel. However, there has still been a lot of shopping tourism in recent weeks. The Federal Council is now taking action against this. Obvious cases will result in a fine of 100 CHF because of the obstruction of border controls.

Persons who are not allowed to enter the country under COVID-19 Ordinance 2 will be rejected entry without a fine. Objections can be submitted to the State Secretariat for Migration (SEM). The following groups of persons may enter Switzerland at any time and for any purpose:

  • Swiss citizens
  • Holders of a residence or work permit (L/B/C/Ci permit) or cross-border commuter permit (G permit for work purposes only)
  • Holders of an FDFA legitimation card
  • Holders of a D or C visa issued by Switzerland for the purpose of attending “professional consultations” as a health sector specialist or for making an “official visit” of vital importance
  • Persons with assurance of a residence permit 

Foreign persons in a situation of absolute necessity may also enter Switzerland, for example for the care of sick or elderly family members, the exercise of visiting rights under civil law, for court and business appointments or for the continuation of medical treatment.

On 29 April 2020, the Federal Council announced the gradual easing of entry restrictions, provided that the progression of the epidemic allows for it. In specific terms, this means that work will start on processing applications for employees from the EU/EFTA area and from third countries that were submitted before 25 respectively 19 March 2020 by . What’s more, new notifications for cross-border services will be processed provided they are based on a written agreement that was concluded before 25 March 2020. Employees from third countries who already have a permit but are still waiting for a visa will now be allowed to enter the country. In addition, family reunification for relatives of Swiss citizens and EU/EFTA citizens living in Switzerland will become possible again. Border controls will continue to remain in place, but additional border crossings will be opened to reduce the long waiting times.

The next steps to ease the lockdown measures will include processing applications from employees from EU/EFTA states from 8 June 2020, so they can actually take up their employment in Switzerland. This will be done in coordination with the cantons and social partners, and only if the progression of the epidemic allows for it.

There are no restrictions on leaving Switzerland at open border crossings. However, those wishing to exit the country should check the current entry requirements of the country they intend to enter.

On 8 May 2020 the «Ordinance on Measures to Combat the Coronavirus (COVID-19)” has been adjusted again. Persons from a risk country or region have to bring a travel document as well as an entry permit together with a visa issued by Switzerland or an assurance for a residence permit.

Foreign nationals, who fall under the FMPA/EFTA Agreement, are not affected by the approval and notification of short notice work, if they fulfill the following criteria:

  • Employment is of public interest, especially in economic national supply (e.g. remedies, care, nutrition, power, logistics as well as information and communication technology)
  • Family reunion (also from Swiss citizens)
  • Application, notification procedure or employment obligations with a Swiss employer have been handed in/entered before 25 March 2020
  • Written service agreement for cross-border services has been concluded before 25 March 2020

Third-country nationals additionally have to comply with the entry requirements according to the Federal Act on Foreign Nationals and Integration (FNIA). These persons only fall out of consideration if they fulfill the following criteria:

  • Prerequisites and permit according to FNIA
  • Application has been approved before 19 March 2020 but the entry permit/visa/assurance for residence permit couldn’t be issued
  • Application has been submitted by the employer before 19 March 2020

Schengen visa as well as national visa and entry permits for persons from risk countries or regions are discontinued.

Furthermore, the federal council has decided that institutions of supplementary childcare, who have a financial loss due to COVID-19, will be supported with around 65 million Swiss francs. The details will be defined in an ordinance on 20 May 2020.

With these significant decisions of the federal council, parents of children with disabilities as well as self-employed who are only indirectly affected by the measures of COVID-19, are being additionally relieved.

Contact us

Brigitte Zulauf

Brigitte Zulauf

Leader Treuhand/Corporate Support Services Switzerland, PwC Switzerland

Tel: +41 58 792 47 50