What is AVS "splitting"?
What is AVS "splitting"?
"Someone recently told me about an "AVS splitting" that you have to apply for after a divorce. What exactly is this? Do I need to take any special steps?
Pascal, Geneva
Under the Federal Law on Old-Age and Survivors' Insurance, the ordinary AVS/AHV pension is calculated on the basis of the average annual income, which is made up of income from gainful employment, bonuses for childcare and bonuses for assistance. The monthly old-age pension is made up of a fraction of the minimum old-age pension (fixed amount) and a fraction of the average annual income (variable amount). Splitting" is the allocation to each former spouse of half of the income they earned during the calendar years they were married to each other, when the marriage is dissolved by divorce. Income earned during the year of marriage and divorce is not taken into account. For example, if the marriage lasted from January 2005 to November 2007, only the income for 2006 will be shared.
On dissolution of a marriage, income splitting may be requested by each spouse separately or by both spouses together from each compensation fund, which keeps an individual account for one or other of the spouses. If neither spouse applies for income splitting, the compensation fund will automatically initiate an income splitting procedure, but only when it has to calculate the pension. In practice, when people have been married several times or when a lot of time has elapsed between the divorce and the calculation of the pension, difficulties may be encountered in obtaining the precise data that are essential for calculating the pension. We therefore recommend that recently divorced couples submit a joint application as soon as possible after the divorce.
It is worth noting here that a person with no income who is married to a gainfully employed insured person is deemed to have paid contributions, provided that his or her spouse has paid contributions equivalent to at least twice the minimum contribution. This special regime ends upon divorce.
