What are the pros and cons of cohabitation versus marriage?
Couples (including same-sex couples since 1 July 2022) can make their love official by marrying. But does marriage make sense for everyone from a legal point of view? Comparis will help you make this personal decision.
17.01.2023
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1. What does "cohabiting" mean?
Married couples have long ceased to be the only "normal" family model. Many families and couples in Switzerland are deciding against marriage and are simply living together instead. There are no specific rules for this way of life.
2. What is a registered partnership?
Same-sex couples were able to enter into a registered partnership up to 1 July 2022. Registered couples were subject to similar legal provisions as married couples. They therefore had to ask themselves whether it was worth registering their partnership or simply living together in a legally non-binding arrangement.
3. How does "marriage for all" change things?
Now that the Swiss electorate has approved the "marriage for all" bill, since 1 July 2022 same-sex couples have been able to convert an existing registered partnership into a marriage.
Here is what changes:
The property regime changes from separation of property to participation in acquired property.
The couple can jointly adopt a child.
It becomes easier for non-Swiss spouses to gain Swiss citizenship.
What's more, the same conditions apply to all couples when they get married. Same-sex couples can marry and are therefore treated in the same way as heterosexual couples. It has not been possible to register new same-sex partnershipssince 1 July 2022. From now on, all couples must ask themselves the same question: is it worth tying the knot?
According to the Ordinance on Civil Status Fees, the necessary conversion declaration costs 75 francs. Couples pay an additional 30 francs for official confirmation of their marital status. If couples want a ceremonial conversion, they have to reckon with additional costs.
4. Is marriage worth it for us?
From an insurance point of view, getting married can pay off. Married people are in a better financial position in the event of death or disability. Cohabiting couples must take action themselves to make sure they will both be provided for. Shared financial arrangements should be checked carefully, especially if one parent steps back from work to look after the children.
From the tax perspective, however, married couples are often at a disadvantage. Cohabiting couples generally pay less tax than their married counterparts.
5. What should cohabiting couples bear in mind?
This list highlights the most important points that cohabiting couples need to think about.
Will: cohabiting couples must make each other beneficiaries when they die. In doing so, they must remember statutory entitlements. For example, any children will by law inherit three-quarters of the estate. If there are no children but parents are still alive, they are entitled to half. Only unrestricted shares of assets may be left to your partner. Please note that some cantons levy very high inheritance taxes on cohabiting partners.
Inheritance contract: you can make a binding agreement with the children that they will waive their inheritance until after the death of your partner.
State pension (OASI/AHV/AVS): the state pension is another area in which cohabiting partners are not treated the same as married couples. The system treats concubine partners completely separately. On reaching retirement age, each receives their ordinary pension. In this respect, cohabiting partners are better placed than married couples or registered partners. In the case of married couples, the couple's pension is limited to 150% of the maximum state pension. On the other hand, cohabiting partners do not receive a widow's/widower's pension should their partner die.
Pillar 3a and pension fund: cohabiting couples also need to take independent action where pension funds are concerned. Not all pension funds automatically offer a solution for them. Where the pension fund regulations do make provision, the deceased must have notified the fund about their cohabiting partner and stated clearly that they wish to provide for them. The same applies to Pillar 3a. Pension funds and Pillar 3a plans may only pay the pension assets out to the partner if the deceased does not leave a spouse or children (up to age 18, or 25 if in education or training) behind. The money otherwise goes to these individuals.
Pillar 3b: you can insure your partner with a death benefits insurance policy. This insurance should be given serious consideration if one partner is the main earner and the other takes care of the family more, for example.
Parenting credit: the parenting credit is shared in the case of married couples and partners with joint custody. If one partner takes on most of the childcare or a party can reach the maximum state pension level without the credit, they can agree in writing that parenting credits are paid to one parent alone.
Inheritance tax: some cantons levy very high inheritance tax on cohabiting partners. It may be worth moving canton for this reason. Inheritance tax is payable at the deceased's principal place of residence. The exception is real estate, which is always taxed at its location.
It is worth cohabiting couples especially checking out their future financial situation in good time. Experts can help here.
6. Cohabitation or marriage? The differences at a glance
| Cohabiting couples | Married couples | |
|---|---|---|
| OASI | A cohabiting couple receives a maximum of CHF 58,800 in state pension per year, while married couples get CHF 44,100 at most (as at 2023). No entitlement to a widow's/widower's pension. |
Widows receive a state survivor's pension if there are children or the wife is 45 or older and was married to her late husband for at least 5 years. Widowers receive a pension if they are still supporting children under the age of 18. |
| Occupational pension fund | Some pension institutions provide for a cohabiting partner's pension, although restrictions apply. | The fund usually pays a survivor's pension. |
| Inheritance matters | Without a will, a cohabiting partner is left empty-handed. It is not always possible to make a cohabiting partner the full beneficiary of a will because of the statutory entitlements of family members. | The spouse is the primary beneficiary under inheritance law. As a legal heir they are entitled to a statutory share of the estate. |
| Pillar 3a | Cohabiting partners are not automatically beneficiaries. Other family members may be entitled to claim a statutory share of the estate. | Surviving spouses are the primary beneficiaries when the estate is settled. |
| Tax | Many cantons levy high inheritance tax on cohabiting partners. | Marriage penalty: both incomes are added together for the purposes of the tax assessment. Depending on the canton, the tax burden may be higher than for cohabiting couples. |
| Separation/divorce | The relationship can be dissolved without any formal requirements. | The financial burden of a divorce is very high. |
This article was first published on 16.12.2019