Financial Support

Only a very small share of the population aged 65–84 benefit from supplementary benefits to old age pensions (6%) or from financial support by family, non- governmental organizations or canton (6%). Since the proportion of the two is exactly identical, it is worth noting that the overlap between these two sources of support, i.e. respondents who benefit from both, is less than 20%. Respondents who

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indicated receiving support are expected to be more vulnerable in monetary terms, as is reflected in the very high rate of objective vulnerability (31% for support, 26%

for supplementary benefits).

The fact that one in four recipients of supplementary benefits remains below the poverty line, a threshold that experts have established as the minimum level of exis-tence, is disturbing and suggests that there is something out of joint in the Swiss pension plan. The Pro Senectute report identifies several types of disturbances that explain this reality, referred to as ‘post-transfer poverty’¹ (Seifert and Pilgram 2009, pp. 59–66). The first one refers to the 14% who are poor (obj_ev) yet who do not receive supplementary benefits. This figure partly reflects a group of pensioners who is legally eligible for support in the form of supplementary benefits. The motives for refraining to make a claim when faced with economic strain range from modesty, a sense of responsibility, fear of stigmatization to a lack of information.

Another type of malfunctioning is the result of a series of mechanisms that manifest in a so-called threshold effect and that are rooted in the high level of standardization of this type of financial transfer: individuals, whose income exceeds the legal mini-mum level of monthly income by very little and who are therefore not eligible to receive supplementary benefits may find themselves excluded from a series of addi-tional privileges and preferential treatments (e.g. tax exemptions). This may end up positioning them in an economically worse-off place than individuals with a virtu-ally identical economic standing but who were assessed as eligible. Another source of inequality has to do with the way the amounts to be disbursed are calculated:

eligibility is assessed based on the one hand on available revenues, which includes 1/10 of the wealth exceeding the amount of exemption² and, on the other hand, on needs composed essentially of a lump sum for living costs, and a regionally varying allowance for rent and health insurance. Thus, depending on the amount factored in for rent and health insurance, the monthly amount at the disposition of an individual might be below the threshold of the poverty line.

Receiving support or supplementary benefits is expected to heighten the indi-vidual self-awareness of vulnerability, resulting in higher rates of sa_ev and perc_

ev, because these transfers are usually received after voicing a need. Indeed, the rate of vulnerability is higher if measured by sa_ev than if measured by obj_ev: sa_

ev  =  34% for support and 47% for supplementary benefits (Appendix 14.1).

Perception of vulnerability is less strongly associated with support but still, 29% of respondents who receive money from an alternative source of support are worried about their finances; among beneficiaries of supplementary benefits, 40% express this concern.

The strength of the relationship measured by the Phi Coefficient is moderately strong for support by family, NGOs and cantons and the Objective Measure (Φ  =  0.11) and the Self-Assessed Measure (Φ  =  0.14). For both indicators it is

1 German: Nachtransferarmut.

2 The amount of exemption is currently CHF 37,500 for individuals living alone and CHF 60,000 for married couples.

14 Economic Resources

statistically highly significant (obj_ev: χ² (1)  =  19.36; p  <  0.001; sa_ev: χ² (1) = 31.97; p < 0.001). The effect size of support and the Perceived Measure is weak but significant (Φ = 0.07; χ² (1) = 7.57; p = 0.006).

For supplementary benefits, the pattern of association changes in favor of the subjective angle: the strength of relationship with self-assessed vulnerability is also moderate (but clearly stronger than for support) at Φ = 0.24 and highly significant (χ² (1) = 90.34; p < 0.001), followed by the moderate and significant association with the perceived indicator (χ² (1) = 32.40; p < 0.001). Objective vulnerability is only weakly associated with benefitting from supplementary benefits, though the relationship remains significant (Φ = 0.08; χ² (1) = 9.39; p = 0.002).

The discrepancy between the measurement angles is particularly interesting in the case of supplementary benefits. In 2011, the minimum amount for living costs below which a person was eligible to receive supplementary benefits was at a monthly CHF 2700 for an individual person living alone³ (BSV 2012). Since this amount ranges above the poverty line of CHF 2400 per month, we expect to detect a threshold effect, expressed in the share of respondents who, while receiving sup-plementary benefits, actually find themselves just above the poverty line and thus no longer ‘economically vulnerable’ by our Objective Measure. There is no statistic on the average income of beneficiaries of supplementary benefits to old age pensions;

in 2011, the average monthly amount disbursed to individuals living alone (not in an institution) was CHF 888 (BSV 2012).

For both types of financial support, supplementary benefits and other sources of support, the mode lies in the income category CHF 2400–3600. As was to be expected, in the case of supplementary benefits some 54% of the benefitting popula-tion group is found in the aforemenpopula-tioned income category just above the poverty line. With the data at hand, it cannot be verified whether the monthly household income of these individuals is located just above 2400 or at the higher end of the income category, closer to 3600.

For the variable financial support, the share of benefitting individuals is more evenly distributed across the three lowest income categories (31%, 33%, 25%). If we assume that financial assistance from family and friends, from cantonal institu-tions or NGOs like Pro Senectute are also based on some kind of criterion, be it standardized or intuitive, the observation that some 70% of beneficiaries are above the poverty line is remarkable and deserves further discussion.

The interpretation of the prevalence of these sources of income according to vulnerability type has to be done with some reservations considering the very small number of respondents who benefit from them. Since the expected cell frequency was less than five for at least one cell, Fisher’s exact instead of chi-square was cal-culated. For both variables, the one-sided test yielded p < 0.001, indicating a statisti-cally highly significant relationship with the Vulnerability Typology.

Type BAA records the highest proportion of individuals receiving either type of financial support (24% supplementary benefits, 19% other types of support). As

3 Eighty-six percent of beneficiaries live alone (BSV 2012).

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previously mentioned, these figures reflect the post-transfer situation; it is likely that some of these individuals are only above the poverty line because of these measures of financial assistance.

Considering the difference between BBB and BBA is enlightening. For supple-mentary benefits, where eligibility is objectively established, there is no reason to expect a difference in share between the two vulnerability types, since the only dif-ference is their response in terms of economic stress measured by perc_ev. This is confirmed in the very similar proportions: 18.2% for BBB, 17.5% for BBA, how-ever, it makes sense that there would be a difference between two groups who dis-tinguish themselves in the intensity of worry about finances, with regard to the proportions receiving support from ‘less standardized’ sources: we indeed find that the group who is more worried receives double the rate of support from canton, fam-ily, friends or NGOs (BBB = 14.6% compared to BBA = 7.5%).