Supplementary Benefits (EL)
Supplementary benefits are means-tested payments made to AHV or IV pensioners when their pensions and other income fail to cover recognised basic living costs.
Concept
Supplementary benefits (Ergänzungsleistungen, EL) to the AHV and IV are a means-tested social benefit, financed from tax revenue, paid when the AHV or IV pension together with the recipient’s other income and assets is insufficient to cover recognised living costs. The EL thus form the last safety net for basic subsistence within the first pillar and are not part of the pension insurance itself, but a separate, needs-based supplement.
Calculation and Eligibility
Entitlement to EL is calculated individually by comparing recognised expenses (including basic living costs, rent, and health insurance premiums) against countable income (pensions, earned income, investment returns); any shortfall is paid as EL. Cantons may additionally contribute towards illness and disability costs.
Relevance for Advisory Practice
EL are particularly relevant in retirement planning for individuals with low earned income or gaps in their contribution history, as inadequate pension planning can be partially offset by EL in old age. At the same time, EL entitlements can be affected by receiving a lump-sum payout from occupational or private pension provision, which must be considered when advising on the form of pension payout.