In its judgment, the Federal Supreme Court (the Court) dismissed, insofar as admissible, a father’s appeal against a judgment of the Cantonal Court of Lucerne (Kantonsgericht Luzern) concerning his entitlement to premium reductions for 2024. At issue was which divorced parent could claim the cantonal flat-rate child deduction in cases of alternating custody.

The appellant is the father of four minor children, who live alternately with each parent but are domiciled with the mother. The father pays child maintenance, which is deductible from his income. The Compensation Office of the Canton of Lucerne (WAS Wirtschaft Arbeit Soziales, Ausgleichskasse Luzern) had refused to grant him the flat-rate deduction of CHF 9’000.00 per child under the Lucerne Premium Reduction Act (Prämienverbilligungsgesetz, PVG) and had therefore denied any premium reduction. The Cantonal Court dismissed his appeal. It applied by analogy the tax-law prohibition on combining a child deduction with a deduction for maintenance payments.

The appellant argued that this violated art. 65 of the Health Insurance Act (Bundesgesetz über die Krankenversicherung, KVG). The Court disagreed: Art. 65 para. 3 KVG, which required cantons to take into account the most current income and family circumstances, was intended to compensate for outdated tax data. It did not determine which parent was entitled to a child deduction. Under art. 65 para. 1 KVG, the cantons had considerable discretion in designing premium reductions. They could rely on tax-law principles and adopt schematic rules for reasons of practicability, even at the expense of fairness in individual cases. As the appellant could deduct his maintenance payments, the denial of an additional child deduction did not frustrate the social purpose of premium reductions.

The Court reviewed the application of cantonal law only for arbitrariness. It expressed doubts about the Cantonal Court’s reliance on the children’s domicile for reasons of practicability but left the issue open. The analogous application of the tax-law prohibition on cumulative deductions was not compelling, but neither was it manifestly untenable, as it prevented the same maintenance burden from being taken into account twice.

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