Swiss Pension Refunds for Returning Aussies - What about Pillar 1?

A wonderful example of Aussie exceptionalism!

I recently covered the process for accessing your Pillar 2 and 3a for Aussies leaving Switzerland and returning to our sea-girt land. A diligent reader asked, “That’s great, but what about Pillar 1 - do I have any entitlements here?”

Pillar 1 is the amount paid to fund the minimum old-age pension as well as life and illness insurance. In most cases, there is never a refund if you are a Swiss or EU national. But in a rare case of Aussie exceptionalism, Australia is only of only 8 countries that can claim a refund of Pillar 1 employee and employer contributions!

How? Well, as you would expect, there is a separate and completely different process that is required compared to Pillars 2 & 3. Let’s break down how it works, what you’ll get, and how to navigate taxes on both sides.

Eligibility: Who Qualifies?

Australia’s social security agreement with Switzerland allows you to claim a refund of your AHV contributions if:

• You’ve contributed for at least one full year

• You’re permanently leaving Switzerland (or have firm plans to do so)

• Your spouse/children under 25 are also leaving (exceptions apply for adult children completing education)
  

This refund option isn’t available to Swiss/EU nationals, making it a valuable perk for Aussie expats.

The Refund Process: Step by Step

1. Wait Until After Departure
   Submit your application after leaving Switzerland. The Swiss Compensation Office (SAK) won’t process requests from residents.

2. Gather Documents
   You’ll need:
   

   • Completed SAK refund form (download from zas.admin.ch)
     

   • Swiss departure certificate (Abmeldebescheinigung)
     

   • Passport copies for you/family members
     

   • Proof of Australian residency.
     
     

3. Mail to Geneva
   Send everything to:
   Schweizerische Ausgleichskasse, Postfach 3100, 1211 Geneva 2, Switzerland
   
   

4. Processing takes ~3 months. Pro tip: Use registered post: Swiss bureaucracy loves paperwork!

How Much Will You Get?

Your refund equals 8.7% of your Swiss gross income during contribution years. This includes both your share (4.35%) and your employer’s (4.35%).

But wait - Switzerland takes a cut first:

• A 35% withholding tax applies to refunds (Tarifcode D).
  

• Example: For CHF 50,000 in contributions:
  Gross refund: CHF 4,350
  Swiss tax: CHF 1,522
  Net received: CHF 2,827
  
  

Australian Tax: Timing Is Everything

The ATO treats your refund as a foreign super lump sum. The tax hit depends on when you transfer it:

• Tax-free option: Transfer within 6 months of becoming an Aussie resident. The entire amount is non-assessable.
  

• Partial tax: Transfer after 6 months? Only the earnings accrued during Aussie residency are taxed.
  

Key Considerations

1. Pension vs. Refund
   If you don’t claim the refund, you’ll receive a Swiss AHV pension at retirement (currently CHF 1,225/month max). For many younger expats, the refund’s upfront cash outweighs future payments.
   

2. Voluntary AHV Contributions
   Returning to Australia? You can’t keep paying into AHV - the refund is a one-time exit option.
   

3. Super Transfer Strategy
   Work with me to:
   

   • Maximize Swiss tax recovery
     

   • Time transfers to minimize Aussie tax
     

   • Coordinate with other pensions (e.g., Pillar 2/3)
     

The Bottom Line

Claiming your AHV refund can inject meaningful cash into your Aussie homecoming fund. While the 35% Swiss tax stings, strategic timing with the ATO’s 6-month rule could make the entire amount tax-free in Australia.

Your action plan:

1. Submit your SAK application ASAP after leaving
   

2. Consult a tax pro familiar with both systems
   

3. Consider transferring funds within 6 months of residency
   

Switzerland’s pension system is notoriously complex, but for Aussies, this refund is a rare streamlined process. Get organised, claim what’s yours, and put those francs to work Down Under.