Maternity and Finances – What You Need to Consider

Author: Melina Scheuber

If you’re embarking on family planning or are already expecting, congratulations! A positive pregnancy test brings incredible joy for both you and your partner.
However, it also raises various questions and concerns: the baby’s health, necessary preparations, the financial implications of the birth, potential workload adjustments, and more.
Here is a concise yet thorough guide on financial considerations for expectant mothers.

Maternity Leave

In Switzerland, working women are legally entitled to 14 weeks of maternity leave from the day of childbirth, provided they:

• Have been insured with AHV for the nine months preceding the birth
• Worked for at least five months during the pregnancy
• Are still employed or self-employed at the time of childbirth

During maternity leave, you’re entitled to 80% of your gross salary, up to a maximum of CHF 196 per day (CHF 5,880 per month). If your gross salary exceeds CHF 7,350 (100%), check whether your employer will cover the difference. Consult your employment contract, personnel regulations, or your employer’s HR department for further details on maternity leave.

Your Current Marital Status

The arrival of children often prompts couples to focus on mutual financial security. Your marital status significantly influences this, especially regarding pension provision and risk cover (death and disability).

Please find here some additional information on old age provision and risk insurance, depending on your partnership status, marriage or cohabitation.
Cohabiting couples, in particular, should consider legal matters such as inheritance, wills, and cohabitation agreements, especially if reducing work hours. This is also relevant in the context of part-time work.
Independently of marital status, it’s advisable to arrange an advance care directive and living will if you haven’t already.

Part-Time Work

While fathers’ employment levels are generally unaffected by family expansion, 73% of mothers reduce their workload to below 70% or take a temporary work hiatus, averaging five years [1].

Such changes significantly impact your pension provision and risk cover, which includes financial security for you and your family in cases of death, disability due to illness (e.g., long Covid, burnout, depression) or accident (e.g., loss of body parts).Explore the specific effects of reduced workload or temporary retirement and what you and your partner can do in response. You find more information here.

Remember, the implications vary between married and cohabiting couples.

Money in the Partnership

Discussing financial matters with your partner is crucial, particularly as a child’s arrival can alter your financial situation and management approach.

Consider whether to merge finances, especially if anticipating a workload reduction or break. Create a detailed family budget by comparing income and expenses (online templates can assist with this). Include future costs associated with your baby, such as health insurance, food, and clothing.

It’s also wise to discuss the potential of separation or divorce during harmonious times.

The financial consequences of workload reduction after childbirth affect career development opportunities, future income, social benefits, and pension provision. This is further elaborated under “Part-time work.”

Revisit the topics of  inheritance, wills, and cohabitation agreements.

Insurance

Health Insurance

Children’s insurance needs differ from adults. For optimal protection, consider basic and supplementary health insurance for your child. Register for basic insurance within three months after birth, with retroactive coverage from birth.

Supplementary insurance, which is optional and subject to health insurance company approval, should ideally be arranged before birth. This ensures guaranteed admission without the risk of rejection.

Also, review other insurances like personal liability, household contents, and life insurance in light of your new family situation.

Disability Insurance

While hoping for your child’s good health, it’s important to be prepared for possible health challenges.

State disability insurance supports children and young people up to age 20 with medical and occupational measures, helplessness compensation, and aids provision. Entitlements vary between congenital disabilities and disabilities acquired later in life.

Youth are eligible for a disability pension and supplementary benefits from age 18, amounting to CHF 14,340 annually (as of 2022).

Consider private child disability insurance to supplement the state pension. This can be customized with various insurance companies, combining risk cover with savings or investment options, providing a lump sum at age 18.

Saving and Investing for Your Child

Anticipate higher expenses, especially for education. Regular savings can help cover these future costs. Given the long-term nature of these investments, consider securities investments, which can offer higher returns compared to traditional savings. Please find here an example on different outcomes when saving or investing.

Child Allowances

In Switzerland, you’re typically entitled to a child allowance of around CHF 200 per child up to age 16, varying by canton. For children aged 15-25 in education, an education allowance of approximately CHF 250 per month is available, also canton-dependent.

These allowances are not automatic; they require application. Employed parents can have their employer handle this, while self-employed parents must apply to the family equalization fund.

You can use these funds for child disability insurance or invest them in a monthly securities savings plan.

Nine months may seem ample, but time flies. Begin addressing these financial aspects early. I wish you a joyous and smooth pregnancy and cherish the moments with your partner before your new arrival transforms your life.

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[1] Federal Office for Gender Equality