Social insurance schemes – first pillar

Obligatory state provisioning constitutes the first pillar of the Liechtenstein social insurance system. All persons resident or employed in Liechtenstein are insured on an obligatory basis. If an individual is gainfully employed in Liechtenstein and in a neighbouring state, then social insurance contributions are payable on the entire income earned in the country of residence.

The pension scheme is an independent agency under public law that is overseen by the government. Employees and employers pay part of the salary into the scheme. The employer is responsible for deducting the respective sums from the salary and forwarding these to the pension scheme. Self-employed persons pay the contributions on a staggered basis, depending on the level of their income. Persons not in gainful employment pay an annual contribution that is dependent on their assets, pension income and other factors.

Old-Age and Survivors’ Insurance (OASI)

Employees pay 3.95 percent of their salaries for OASI, while employers deduct 4.15 percent. To establish an entitlement to an OASI pension, an individual must have paid OASI contributions for at least one year.

OASI provides the following benefits:

- old-age pension
- child pension for old-age pension
- survivor's pension
- widow’s pension
- orphan's pension
- further support          

Disability Insurance

Employees and employers each pay 0.75 of the salary into the disability insurance scheme. The primary goal of disability insurance is to support disabled persons to such an extent that they are able to earn their own living wholly or in part and can lead lives that are as independent as possible. The disability pension is of secondary importance. This is paid only if the reintegration measures were not or were not sufficiently successful, or if these would be futile from the outset.

Disability insurance provides the following benefits:

• Reintegration measures
• Disability pension benefits

Family Compensation Fund

The employer pays 1.9 percent to the Family Compensation Fund on behalf of the employee. In addition, the employer pays 0.2875 percent to cover administrative costs.

The Family Compensation Fund provides the following benefits:

• Child allowances
• Birth allowances
• Single parent allowances

Family allowances are designed to protect the family economically by offsetting some family overheads. They do not represent remuneration for performed work, and therefore do not constitute part of the earned income.

Persons who are entitled to claim comparable foreign allowances are not entitled to claim family allowances. Persons resident in Liechtenstein receive compensation for the difference, if the foreign family allowances are lower than the Liechtenstein benefits.

Unemployment Insurance

The unemployment fund is financed by contributions from employers and employees. Unemployment insurance is paid by employees and employers, who both pay 0.5 percent into the scheme. Unemployment insurance contributions are deducted by the OASI/Disability Insurance/Family Compensation Fund agencies. Unemployment insurance covers the following fields:

• Unemployment benefit
• Short-time working benefit
• Inclement weather benefit (German only)
• Insolvency compensation

Cost overview