In some parts of Switzerland welfare payments are effectively loans that must be repaid when the recipient’s financial situation improves.
According to the Aargauer Zeitung, a welfare recipient in the commune of Klingnau in the canton of Aargau received a bill of 173,000 francs after he came into some money.
A windfall of 173,000 francs is rare, according to Rolf Walker, head of administration at the commune. Where the money came from in this case was not disclosed, but in some cases it comes from inheritance or a lottery win. The obligation to make repayments lasts 15 years.
The 173,000 franc repayment is equivalent to a tax charge of 2.5% in the commune of 3,400 residents, where 48 are on welfare. From 2015 to 2017, Klingnau’s social spending averaged 810,000 francs a year, with annual repayments averaging 190,000 francs.
Not all Swiss cantons operate this way. The canton of Basel-Landschaft is another canton that does.
Earlier this year, a single mother in Münchenstein in the canton of Basel-Landschaft was asked by her municipality to repay CHF 224,866 francs of welfare she had received. The repayment request was triggered when she started earning a monthly salary of 6,700 francs.
While this system might incentivize some to quickly get off welfare, once the amount of any potential repayment rises above a certain sum, it might also reduce the motivation to find a well paid job.
Aargauer Zeitung article (in German)