Childcare in Switzerland
Childcare can get expensive in Switzerland. Therefore, some employers choose to support their employees either directly by paying a childcare allowance or indirectly by offering daycare services through their own daycare center or by financing external daycare services. Whether and to what extent these benefits are subject to OASI contributions must be assessed thoroughly.
Decision 9C_466/2021 (selected for official publication): Obligation to pay OASI contributions
On 17 October 2022, the SFSC passed a judgment regarding an employer's obligation to pay OASI contributions on daycare benefits (so-called "KiTa-Subventionen") in relation to company-owned or affiliated daycare centers. In essence, those daycare benefits cannot be classified as so-called family allowances ("Familienzulagen"), which pursuant to the applicable social security regulations, would be exempt from the obligation to pay OASI contributions, and hence employers must pay the pertinent contributions.
The referenced judgment concerned the University Hospital of Basel ("Universitätsspital Basel" (USB)), which operates its own daycare center. Hospital employees who make use of those daycare services have the possibility of receiving financial support from the USB, whereas the financial aid is paid directly to the daycare center rather than to the employees. During an audit ("Arbeitgeberkontrolle") in 2019, the competent social security authority ("Ausgleichskasse Arbeitgeber Basel") concluded that the USB falsely did not pay OASI contributions on the daycare benefits. After the USB appealed this decision, the Social Security Court of the Canton of Basel-Stadt found that the daycare benefits are exempt from the obligation to pay OASI contributions and classified the daycare subsidies as family allowances, which are exempt from the OASI contribution obligation under Article 6 of the OASI Ordinance.
According to the SFSC, in particular household allowances qualify as family allowances, which are fixed benefits independent of an employee's salary and which must be the same for all employees entitled to them. The SFSC came to the conclusion that, in contrast to family allowances, the relevant USB daycare subsidies were income-dependent and tied to the employment relationship and the age of the child to be cared for and were assessed on a case-by-case basis rather than being paid unconditionally. Since these factors are not compatible with the character of a family allowance, the SFSC upheld an appeal against this decision filed by the Federal Social Insurance Office.
Recommendation
It is recommended to assess whether existing daycare benefits are subject to pertinent social security contributions. Going forward, there is a possibility that social security authorities will devote more attention to daycare benefits paid by the employer while conducting social security audits. Therefore, the authorities might claim contributions plus interest to be paid retrospectively up to five years. However, if the authorities have conducted an audit in recent years, depending on the specific circumstances it might be possible to counter any of their claims based on the argument of protecting legitimate expectations and trust ("Vertrauensschutz"), provided no objections were raised within the past audits. In addition, employers might consider an object financing of the daycare center, i.e., a lump sum payment in advance, which cannot be attributed to the individual beneficiaries. Finally, we would like to remind employers and employees that the same as with daycare benefits applies to tuition costs ("Schulgelder"). If such costs are paid by the employer, these payments also count as part of the relevant salary subject to OASI contributions.
