Distraint of Earned Income: How to Protect Your Minimum Subsistence Level

When the debt enforcement office announces a distraint of earned income, many debtors feel trapped. Suddenly, their monthly salary becomes subject to compulsory debt enforcement measures. However, Swiss law provides effective safeguards. Those who understand the applicable rules can often achieve a manageable solution.

The Legal Basis: Protection of the Minimum Subsistence Level

Distraint of earned income is governed by Article 93 of the Swiss Federal Act on Debt Enforcement and Bankruptcy (SchKG/DEBA). Income from gainful employment of any kind, which isn’t completely unseizable according to Article 92 DEBA may only be attached to the extent that, in the discretion of the debt enforcement officer, it exceeds what is absolutely necessary for the debtor and the debtor’s family. Article 93 DEBA guarantees the debtor and the debtor’s family the ability to maintain a decent standard of living (Federal Supreme Court, 5A_792/2021).

Importantly, the attachment of earnings is limited to a maximum period of one year (Art. 93 para. 2 DEBA).

The Minimum Subsistence Level: What Cannot Be Attached?

When calculating the debtor’s protected minimum subsistence level, the debt enforcement office relies on the Guidelines for the Calculation of the Debt Enforcement Subsistence Minimum issued by the Conference of Swiss Debt Enforcement Officers. The following items are generally taken into account:

• Basic living allowance
• Rent and heating costs
• Mandatory health insurance premiums for basic health insurance (Federal Supreme Court, 7B.225/2003)
• Annual deductible under the mandatory basic health insurance scheme (BGE 129 III 242)
• Necessary commuting expenses
• Family allowances for dependent children

The debt enforcement office’s calculation of the minimum subsistence level does not constitute a formal administrative decision; rather, it serves as the justification for determining distraint of earned income.

Important Deductions

If the debtor lives with an adult child, an appropriate contribution by the child towards housing costs must be taken into account. Benefits received in kind, such as free meals or employer-provided work clothing, are deducted from the minimum subsistence level.

The following expenses are not taken into account:

• Taxes
• Premiums for private life insurance policies (BGE 81 III 144)

Fixed Garnishment or Fluctuating Income?

Where the debtor receives a regular salary, the debt enforcement office will generally destrain a fixed amount or percentage.

Where income fluctuates – for example, for hourly-paid employees or seasonal workers -the office determines the monthly minimum subsistence level and instructs the employer to remit all earnings exceeding that amount.

The debtor’s financial circumstances at the time of the distraint are decisive. The debt enforcement office must investigate the relevant facts ex officio. Nevertheless, the debtor is obliged to inform the authority of all material circumstances (Federal Supreme Court, 5A_567/2013).

The Right to Equalisation: An Often Overlooked Protection

Where income fluctuates, the debtor is entitled to an adjustment if earnings temporarily fall below the minimum subsistence level. The debt enforcement office must refrain from distributing wage surpluses to creditors prematurely (Federal Supreme Court, 5A_567/2013).

Most importantly, the debtor does not have to wait until the end of the distraint period. If the debtor can demonstrate the amount of lost income, the debt enforcement office must immediately pay out the amount necessary to restore the minimum subsistence level from any available wage surpluses (Federal Supreme Court, 5A_567/2013). Temporary reductions in income may therefore be offset against attachable surplus income earned during other periods (BGE 102 IV 248).

Direct Payment of Health Insurance Premiums

Since 1 July 2024, an important amendment has entered into force. Upon the debtor’s request, the debt enforcement office may instruct the employer to transfer, in addition to the attachable portion of the salary, the amount required to pay the debtor’s current mandatory health insurance premiums directly to the office (Art. 93 para. 4 DEBA). The office then pays these premiums directly to the health insurer.

A debtor who fails to pay mandatory health insurance premiums risks having these premiums excluded from the calculation of the minimum subsistence level (Federal Supreme Court, 2C_884/2022). This may increase the attachable portion of the debtor’s income.

The Employer’s Role

The employer acts as a third-party debtor. Pursuant to Article 99 DEBA, the employer is notified that payments with discharging effect may thereafter only be made to the debt enforcement office. The employer has no legal standing to challenge the distraint of earned income by way of appeal.

Adjustment and Revision

If the debtor’s circumstances change, the debt enforcement office must adjust the distraint of earned income accordingly (Art. 93 para. 3 DEBA). Subsequent changes in circumstances must be raised by the debtor through an application for revision before the debt enforcement office (Federal Supreme Court, 5A_567/2013). As a rule, such revisions are made only upon request.

Conclusion

Distraint of earned income represents a significant interference with a debtor’s financial situation, but it is not without limits. Swiss law provides important safeguards to protect the debtor’s minimum subsistence level. Those who understand the applicable rules and actively cooperate with the debt enforcement office can often achieve a fair and sustainable outcome.