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Melting fortunes in old age

especially in the case of dependency on long-term care and admission into a nursing home.

Can you avoid this with gifts or advancement of inheritances? What, if anything, should be done?

And how secure are your assets after your death? Starting in 2021, heirs must repay supplementary benefits that were paid out after January 1, 2021 provided the estate amounts to more than CHF 40,000.

Needs-based minimum benefits

People in need of care have to bear most of the costs themselves when they are admitted to a nursing home, which involve vast sums of money. If your income and assets are not sufficient, you have a constitutional, unconditional right to receive supplementary benefits as social insurance benefits. The net assets may not exceed CHF 100,000.– for single persons or CHF 200,000.– for married couples respectively (cf. Art. 9a para. 1 Federal law on supplementary benefits to old-age, survivors’ and disability insurance, Supplementary Benefits Act).

When calculating the assets, owner-occupied properties amounting to CHF 112,500.– or CHF 300,000.– are not taken into account if a single person or a spouse lives in them respectively (cf. Art. 9a Para. 2 in conjunction with Art. 11 Para. 1 lit. c and Art. 11 Para. 1bis Supplementary Benefits Act).

The tax allowances for the consumption of assets are reduced to CHF 30,000.– for single persons and CHF 50,000.– for married couples. If the allowance amounts are exceeded, part of them will be imputed as income (cf. Art. 11 Para. 1 lit. c Supplementary Benefits Act).

Are you contemplating gifting to avoid this?

It is of no benefit if you give away your savings. Gifts are added, up to an annual allowance (of CHF 10,000.– if the assets do not exceed CHF 100,000.–) (cf. Art. 11a para. 3 Supplementary Benefits Act). Gifts of assets are treated as actual assets and consequently added.

What does a voluntary waiver mean?

A person renounces voluntarily if he/she does so without any legal obligation and without equivalent consideration (cf. Art. 11a para. 2 Supplementary Benefits Act). This includes the consumption of assets in excess of ten percent of the property per year without good cause (cf. Art. 11a para. 3 Supplementary Benefits Act).

Furthermore, gifts or advance inheritance payments to descendants as well as the sale of assets below market value are regarded as voluntary waivers.

If you do this anyway, you risk reductions in supplementary benefits. You may even forfeit your entitlement to supplementary benefits.

What can you do?

Among other things, you can live at home for as long as possible with Spitex support in a wheelchair-accessible apartment.

How secure are your assets after your death?

Even after your death, your savings are not safe: Legally drawn benefits received by a person for 10 years from January 1, 2021 before death must be refunded from the estate if it exceeds CHF 40,000.–. In the case of married couples, the obligation to reimburse takes place only from the estate of the second deceased (cf. Art. 16a Supplementary Benefits Act).

Obligation to make restitution, right of recourse against co-heirs

The obligation to reimburse is allowed to infringe the heirs’ compulsory share. It is limited to the estate. The compensation office issues an order. It may address one heir, since all heirs are jointly and severally liable for this debt. The claimed heir has a right of recourse against his co-heirs for the part he has paid more than his quota entitlement to the estate (cf. Art. 640 CC).

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