#1. Legislative History
N. 1 Art. 112 FC transfers the former Art. 34quater and 34quinquies of the old Federal Constitution of 1874 (oFC) into the new constitutional law. The OASI was incorporated into the Federal Constitution by popular vote on 6 July 1947; invalidity insurance followed in 1958 by popular vote. In the total revision of 1999, these provisions were systematically consolidated and modernised (BBl 1997 I 296 ff., 348 f.).
N. 2 In the dispatch on the new Federal Constitution, the Federal Council formulated that Art. 112 FC should enshrine the «constitutional cornerstones» of the universal insurance scheme without restricting the legislature's freedom to shape it (BBl 1997 I 298). The principles in para. 2 were deliberately designed as minimum constitutional standards that impose limits on the legislature without prescribing a specific regulatory approach (BBl 1997 I 349).
N. 3 Letter abis in para. 2 (cash and benefits in kind) was inserted by popular vote on 28 November 2004 and has been in force since 1 January 2008 (AS 2007 5765; BBl 2002 2291; 2003 6591). This addition responded to the growing importance of integration measures (benefits in kind) in invalidity insurance. Para. 6 has become moot following expiry of the associated transitional provision.
#2. Systematic Classification
N. 4 Art. 112 FC appears in the 11th section of Chapter 3 of the FC («Social Insurance») and constitutes a federal legislative competence provision. The provision does not establish individual subjective rights against the Confederation, but is directed at the federal legislature. It is therefore a competence provision with substantive design mandates (→ Art. 3 FC; Häfelin/Haller/Keller/Thurnherr, Schweizerisches Bundesstaatsrecht, 10th ed. 2020, N 2522).
N. 5 The principles in para. 2 are normative directives: the legislature is obliged to shape the OASI/II in accordance with these standards, but may determine the specific modalities of implementation itself. Unlike fundamental rights (Art. 7–36 FC), the principles of Art. 112 para. 2 FC do not produce direct third-party effect; they are justiciable insofar as a federal act would manifestly fall short of them (Rhinow/Schefer/Uebersax, Schweizerisches Verfassungsrecht, 3rd ed. 2016, N 3192).
N. 6 Art. 112 FC is closely connected in subject matter with a number of other social-constitutional articles: ↔ Art. 112a FC (supplementary benefits for OASI/II), ↔ Art. 112b FC (promotion of the integration of persons with disabilities), ↔ Art. 112c FC (elderly and disabled persons), → Art. 41 FC (social goals), → Art. 12 FC (right to assistance in situations of need). The supplementary benefits under Art. 112a FC close the gap that arises when pensions under Art. 112 para. 2 lit. b FC do not cover the cost of basic subsistence in individual cases (BGE 139 V 358 E. 4.1; BGE 131 V 256 E. 6.2).
#3. Elements of the Provision / Normative Content
#Paragraph 1: Federal Legislative Competence
N. 7 Art. 112 para. 1 FC confers on the Confederation exclusive legislative competence for the OASI and II. The cantons have no independent regulatory authority in this area; their participation is limited to implementation (→ Art. 3 FC; Häfelin/Haller/Keller/Thurnherr, op. cit., N 2519). The competence covers all three branches of insurance: old-age insurance (OASI), survivors' insurance (part of the OASI), and invalidity insurance (II).
N. 8 The competence is exercised by statute through the OASIA (SR 831.10), the IIA (SR 831.20), and the GSSIA (SR 830.1) as its general part. The General Part of Social Insurance Law (GSSIA) applies insofar as the special acts do not expressly derogate from it (Art. 1 para. 1 OASIA; Art. 1 para. 1 IIA).
#Paragraph 2: Design Mandates
N. 9 Compulsory insurance (lit. a): Compulsory membership is a constitutive feature of the OASI/II as a universal insurance scheme. It safeguards the solidarity community of all insured persons and is a precondition for the pay-as-you-go system. The Federal Supreme Court has clarified that the OASI «is, by its very conception, a universal insurance scheme intended to adequately cover subsistence needs upon the occurrence of the insured risk» (BGE 131 V 97 E. 4.3.3). The abusive exploitation of compulsory membership — in particular the utilisation of insurance coverage for purely yield-generating purposes — is contrary to the prohibition of the abuse of rights (Art. 2 para. 2 CC; BGE 131 V 97 E. 4.3.4).
N. 10 Cash and benefits in kind (lit. abis): The addition in force since 2008 codifies what the OASIA and the IIA already provided. Cash benefits include in particular old-age, survivors' and invalidity pensions as well as daily allowances; benefits in kind include medical treatment and integration measures under the IIA. The inclusion in the constitutional text serves to reaffirm the priority of integration in the II (BBl 2002 2291, 2302; Häfelin/Haller/Keller/Thurnherr, op. cit., N 2523).
N. 11 Adequate coverage of subsistence needs (lit. b): Pensions must «adequately» cover subsistence needs. This concept is a constitutional standard, not a precisely quantified amount. In BGE 136 V 286 E. 6.2, the Federal Supreme Court, relying on Art. 112 para. 2 lit. b FC, held that arrears of pension «are designated to cover the subsistence needs of the insured person». Adequate coverage is to be understood in relative terms: it does not presuppose an entitlement to full maintenance, but requires more than the absolute subsistence minimum under Art. 12 FC (BGE 131 V 256 E. 6.2; Rhinow/Schefer/Uebersax, op. cit., N 3195). Where pensions fall short of subsistence needs in individual cases, the system of supplementary benefits under Art. 112a FC comes into play.
N. 12 Pension ratio (lit. c): The maximum pension may not exceed twice the minimum pension. This restriction on the spread is an expression of the solidarity-based redistribution function of the OASI: by limiting the contribution-to-pension ratio, a redistribution from high-wage to low-wage insured persons takes place. The Federal Supreme Court described this mechanism in BGE 131 V 97 E. 4.3.3 as «actuarial solidarity», under which the contribution obligation is in principle unlimited upwards, whereas pension benefits are capped by the maximum thresholds. Art. 34 OASIA gives concrete effect to the constitutional requirement: the minimum pension currently amounts to CHF 1,225 per month and the maximum pension to CHF 2,450 (as at 2024; Art. 34 OASIA in conjunction with Art. 33ter para. 1 OASIA).
N. 13 Pension adjustment (lit. d): Pensions must be adjusted at least in line with price developments. This safeguards the real value of pensions. Art. 33ter OASIA provides for periodic adjustment to wage and price developments (the so-called mixed index), which goes beyond the constitutional minimum. The Federal Council raised pensions to the aforementioned level for 2024 (Ordinance of 25 October 2023, AS 2023 603).
#Paragraphs 3–5: Financing
N. 14 Art. 112 paras. 3 and 4 FC establish the dual financing system: the insurance is financed through contributions from insured persons (lit. a) and contributions from the Confederation (lit. b). Contribution financing is based on the wage-percentage system; employers pay half of the contributions for their employees (parity-based contribution financing; Art. 112 para. 3 lit. a FC). The cantons do not contribute to the financing of the OASI; the federal contribution is its sole public-sector source (Häfelin/Haller/Keller/Thurnherr, op. cit., N 2524).
N. 15 The upper limit of the federal contribution under Art. 112 para. 4 FC is at most half of expenditure. In recent times the federal share has in fact been considerably below this constitutional ceiling: according to FSIO, Swiss Social Insurance Statistics 2023, Tab. 2.1, the federal contribution to the OASI amounted to approximately 20% of total expenditure. The constitutional legislator designed the 50% threshold as an absolute upper limit, not as a minimum guarantee.
N. 16 Art. 112 para. 5 FC designates earmarked taxes as the primary financing source for the federal contribution: the net proceeds of the tax on tobacco, the tax on distilled spirits, and the levy from the operation of casinos. The Federal Administrative Court confirmed in BVGer A-1211/2018 E. 5.2 that Art. 112 para. 5 FC elevates the tobacco tax to a constitutionally earmarked tax. The Federal Supreme Court set aside the FAC judgment (BGer 2C_350/2019 of 29 January 2020), but left the constitutional classification of the tobacco tax as an earmarked tax undisputed.
#4. Legal Consequences
N. 17 If a federal act violates the principles of Art. 112 para. 2 FC, it nonetheless remains applicable law pursuant to Art. 190 FC. The Federal Supreme Court cannot invalidate a federal act on account of a violation of Art. 112 para. 2 FC. However, it may invalidate implementing ordinances where they violate constitutional law or the relevant federal act (BGE 150 V 410 E. 9.1; BGE 131 V 256 E. 5.4). In BGE 150 V 410 E. 10.6 the Federal Supreme Court declared Art. 26bis para. 3 IIO (in the version of 3 November 2021) to be unlawful because it exceeded the delegation framework clearly articulated in the dispatch on the further development of the IIA; the principles enshrined in Art. 112 FC of a concrete, individualised assessment of invalidity operated as a standard of interpretation.
N. 18 The entitlement to pension adjustment under Art. 112 para. 2 lit. d FC is binding on the legislature. Locher/Gächter characterise it as a constitutional duty that the federal legislature must discharge through appropriate adjustment mechanisms, without, however, establishing subjective entitlements to benefits by individual insured persons in the event of a dispute (Thomas Locher/Thomas Gächter, Grundriss des Sozialversicherungsrechts, 4th ed. 2014, § 18 N 4). The duty of adjustment is accordingly not directly enforceable by action, but binds the legislature as a normative directive (Rhinow/Schefer/Uebersax, op. cit., N 3196).
#5. Contested Issues
N. 19 Legal character of Art. 112 para. 2 FC: It is disputed whether the principles in para. 2 are to be understood as constitutional minimum standards (minority view: strictly binding individual rights) or merely as design mandates addressed to the legislature. The prevailing view treats them as directives without the capacity for direct individualisation: Häfelin/Haller/Keller/Thurnherr (op. cit., N 2522) expressly classify Art. 112 FC as a competence provision with substantive constraints; Rhinow/Schefer/Uebersax (op. cit., N 3192) emphasise that the principles are «justiciable only insofar as a federal act would manifestly fall short of them», which in any event, owing to Art. 190 FC, is referred to the political level. A dissenting minority view — which conceives Art. 112 para. 2 lit. b FC as a direct constitutional entitlement to benefits — finds no support in Federal Supreme Court practice.
N. 20 Relationship to the guarantee of property: The legislature enjoys wide discretion in shaping the OASI/II. Whether reductions in benefits are to be measured against Art. 26 FC (guarantee of property) is disputed. In its consistent case law (cf. BGE 131 V 97 E. 4.3.3) the Federal Supreme Court has emphasised the «insurance-based nature» of the OASI, while at the same time highlighting its character as a universal insurance scheme, which precludes full contribution-to-pension equivalence. Müller/Schefer (Grundrechte in der Schweiz, 4th ed. 2008, p. 917) note that accrued pension entitlements enjoy protection under the guarantee of property, but that the legislature retains considerable discretion with respect to prospective reductions in benefits.
N. 21 Assessment of invalidity and constitutional principles: With BGE 150 V 410 E. 9.5.1 and 10.1–10.6, the Federal Supreme Court strengthened the principles of individualised, as far as possible concrete assessment of invalidity under Art. 16 GSSIA in conjunction with Art. 112 FC. It held Art. 26bis para. 3 IIO (2021–2023) to be unlawful because the exhaustive restriction to a single deduction factor («part-time deduction») did not correspond to the statutory delegation framework and the regulatory intention documented in the dispatch BBl 2017 2668 — namely the codification of the existing case-law principles on the deduction for health-related limitations. The judgment demonstrates that the adequate coverage of subsistence needs enshrined in Art. 112 para. 2 lit. b FC indirectly influences the interpretation of implementing law.
#6. Practical Notes
N. 22 When interpreting the OASIA, the IIA and their implementing ordinances, legal practitioners must apply the constitutional principles of Art. 112 para. 2 FC as a standard of interpretation. Where implementing law is unclear, Art. 112 para. 2 lit. b FC (adequate coverage of subsistence needs) serves as a guiding principle for constitutionally conform interpretation (BGE 150 V 410 E. 10.4.1; → Art. 190 FC).
N. 23 The prohibition of the abuse of rights applies throughout OASI/II law (Art. 2 para. 2 CC). Limited partnerships and other constructions aimed exclusively at accruing pension entitlements without genuine gainful activity must be classified as an abuse of rights pursuant to BGE 131 V 97 E. 4.3.4, without the need to establish fault on the part of those involved.
N. 24 The financing rules in Art. 112 paras. 3–5 FC are authoritative when assessing the earmarked-tax character of the tobacco tax and the casino levy. Authorities deciding on the use of these revenues are constitutionally bound by the earmarking. Any other use would be incompatible with Art. 112 para. 5 FC (BVGer A-1211/2018 E. 5.2; the qualification as an earmarked tax remained unaffected by BGer 2C_350/2019).
N. 25 In the field of invalidity insurance, the assessment of invalidity income — even after the further development of the IIA (FDRIA, in force from 1 January 2022) — must additionally draw on the existing case law concerning the deduction from tabular wages, insofar as the rule in Art. 26bis para. 3 IIO is insufficient in the individual case to satisfy the constitutionally mandated objective of as concrete an assessment of invalidity as possible (BGE 150 V 410 E. 10.6).