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Marriage is a great thing in which I believe. However, something that not many people know is that in Switzerland, you are better off financially if you are not married. There are several disadvantages to being married in Switzerland.
Do not take me wrong, I am not saying you should not get married! We got married last year and I do not regret it at all. Marriage is about love not about money! But I know that in the future, we would be better off financially if we did not marry. This is important to know the differences between married couples in Switzerland, especially if you plan to retire here.
So in this post, we are going to see what financial difference there are between a married couple and an unmarried couple. You will see that there are some substantial differences in taxes and retirement for married couples.
Marriage in Switzerland
In Switzerland, everybody has a civil status: Married, Single, Divorced or Separated. This is an official status that the government is keeping track of.
That means that every marriage is made in front of the law. People can then also do a religious marriage. But the religious marriage is entirely optional and does not matter for the government.
For the administration, several things are then dependent on whether you are married or not. We are going to see two things that are very different: taxes and retirement.
One thing that will change a lot whether you are married or not is the amount of taxes you will pay. If you are not married, you will fill two declarations for taxes. If you are married, you will fill a single one. The difference is that in the latter case, both your income will be accumulated together.
You may think this is the same, but there is a big difference. If you add two income together, you will pay more taxes than if you pay separate taxes on both incomes. The reason is that the more income you get, the more taxes will you pay for extra income. Each extra dollar is taxed at increasing marginal tax rates. So, if you both have a large income, you may end up paying a lot more.
Since Switzerland is a federal republic, it gets more complicated because each state has different rules. Some states are trying to compensate for the fact that married couples are penalized. It will really depend based on which state you are living in. You need to get information from your state tax department. In some states, married couples will pay more, this is the general situation. In some states, they will both pay the same. And in some states, it is actually better to be married. Overall, married couples are disadvantaged in Switzerland.
I am currently living in the state of Fribourg in Switzerland. I am quite lucky because, in this state, it is actually not bad to married. There is a slight tax advantage to be married in Fribourg. This is especially true when we have only one salary as we currently have.
Another thing that is extremely unfair to Swiss couples is about the retirement pension. In fact, the first pillar pension is highly unfair to married couples. The maximum pension for a single person is 2350 CHF per month. So an unmarried couple will get 4700 CHF per month. But a married couple will only get 3525 CHF per month. This is more than 1000 CHF less per month than if they were not married. If we were to divorce before retirement, we could get more than 1000 CHF per month. We are not considering doing that at all. But it is really sad that this is the case.
I think this is really bad. The reasons for this unfairness are very old. They date back from the time when only the man was working and bringing the money for the family. Therefore, when they started the first pillar, they decided that the contribution of the wife was less important and therefore in retirement, the man should get more than the wife, hence only the 150% for a married couple. This may have been true in the past. But this is not the case anymore. This should really be fixed. There was a discussion about that. But it was refused because it would have cost too much to the first pillar.
In the future
It is possible that the tax penalty for married couples changes in the future.
In 2016, we voted for this in Switzerland. Unfortunately, the Swiss citizens decided that they did not want to change that. Therefore, it remains unfair.
However, there were some errors in the campaign that was run for this change. Indeed, during the campaign, they announced that only 80’000 couples were subject to this penalty. But shortly after the votation, it was announced that it was an error and that it was, in fact, 454’000 married couples that were impacted.
So it is highly possible that the results of the vote will be invalidated and that we have to vote again on this. And since the previous results were very close, only 50.8% of nos, it is quite possible that this time the initiative passes, bringing fairness to the situation.
As you can see, there are two large disadvantages in getting married in Switzerland. In my opinion, the biggest one is that you do not get two pensions in retirement. You only get 150% of a single pension. This does not make sense and is quite sad. For me, married couples and unmarried couples should pay exactly the same amount of taxes and should receive exactly the same amount of pension in retirement. Another thing is that the couple is responsible for the previous debt of the two persons.
Nevertheless, this does not mean you should not marry. We got married and do not regret it!
On the other hand, there are also some advantages to getting married. You will pay fewer taxes on inheritance for instance. And if one of the spouses dies, the other one is entitled, under some conditions, to a widow’s pension.
In the end, money should not play a role in choosing whether to marry or not! Only love and personal reasons should come into play in that decision. Nevertheless, it is important to know the differences between a married couple and an unmarried one before you get married!
To learn more about some of the disadvantages of living in Switzerland, you can read about the five things I hate about Switzerland.
Do you see any other disadvantage of getting married in Switzerland?