Disability benefits and pensions in Nordic countries
NordenBladet – In all the Nordic countries, people with a reduced workability due to physical and/or mental disability may be entitled to a disability benefit. The rules for entitlement in the disability pension schemes differ across the Nordic countries as do the size and type of pension available.
Disability pension in the Nordic countries
The disability pension schemes in the Nordic countries makes it possible for people with reduced workability to have a permanent income. This part of the social protection policies in the Nordic countries typically target the adult population from 18 years of age. People who receive disability pension in the Nordic countries will often continue to do so until they reach the age for receiving old age pension.
There are various reasons for applying for a disability pension, and the disability schemes in the Nordic countries demonstrate differences in how people with disabilities are supported. In most cases, the workability is assessed as part of the application process. In some of the Nordic countries, the amount of disability pension receivable is set according to the residual workability.
Additionally, the length of residence, activity in the labour market, and citizenship are considered relevant when determining entitlement to disability pension in the Nordic countries.
Overview of national disability pension structures
All Nordic countries have different structures on the disability pension schemes. In the document below you will find a table with a list of comparisons of key features on this part of the social protection policies in the Nordic countries.
The table cover rules from the year 2022 on the foundations for granting disability pension and supplementary pensions.
View: Disability pension structures, 2022
Overview of national rules applying to disability pension in Nordic countries
The Nordic countries have different names applying to this type of social protection. The names indicate how the country help and support recipients. Following this the rules and regulations are different across the Nordic countries. In the document below you will find a table with a list of comparisons of key features on this part of the social protection policies in the Nordic countries.
The table cover rules from the year 2022 on i.e., relevant age group, level of workability, size of pensions and pension indexation. Variations within each country is listed in footnotes.
View: Rules applying to basic pension/disability pension, 2022
Denmark
The disability pension (Førtidspension) may be granted to any person aged whose age is above 18 and below the retirement age, whose workability is permanently reduced to the extent that they are unable to support themselves.
However, people under the age of 40 have restricted access to the disability pension system. Instead, they are required to participate in a resource clarification process, which consists of holistically oriented activities intended to develop their workability. In cases where it is evident that the individual in question cannot return to work, the local authorities may still award a disability pension.
Faroe Islands
The disability pension (FyritĂĂ°arpensjĂłn) is divided into three different levels according to the pensioner’s ability to work. Highest level is awarded pensioners with no work ability. The pension consists of a basic amount, a supplement, and a disability benefit. The basic amount and disability benefit is tax-free. Furthermore, disability pensioners are subject to tax-reduction.
The disability pension is adjusted in relation to pensioner’s own income from work and pension funds.
Finland
The disability pension (Työkyvyttömyyseläke) in earning-related pension system consists of the pension accrued during the work history and a projected pension component that is calculated from the beginning of the year of the pension contingency to the age group’s retirement age. As a rule, the projected pension component is determined based the average earnings for five years before disability pension. Disability pension grated to a person for a limited period is called rehabilitation benefit. Disability pension may be granted in full or partial depending on the remaining workability.
If a person has no working history or it is short, he receives disability pension from the national pension system.
Iceland
The disability pension (örorkulĂfeyrir and tekjutrygging) consists of a basic amount and an age-dependent benefit addition. The age-dependent benefit is an addition to the disability benefit and is gradually reduced the older the pensioners are when they are granted disability benefit. People aged 24 or younger when they are granted a disability pension receive 100 per cent of the amount of the basic pension, and people who are aged 61 to 66 when they are granted disability benefit receive 2.5 per cent of the amount of basic pension. Disability pensioners who live alone in a flat may also be granted special benefit called “heimilisuppbĂłt”. A special benefit can be made available to those with little or none other income.
Norway
Disability benefit (Arbeidsavklaringspenger, AAP) can be granted to persons whose income is permanently reduced by at least 50 per cent due to permanent illness, injury, or deformity. The medical condition must be the main cause of the inability or reduction of the workability. The disability benefit is calculated based on the average pensionable income of the best three of the previous five years before the onset of disability. Income exceeding 6 times the basic amount (Grunnbeløpet) is not considered. The disability benefit rate per year is 66 per cent of the calculation basis. Persons with low or no previous income are given a yearly minimum.
The recipient of a full disability benefit may have an annual income from work of up to 40 per cent of the basic amount without any reduction of the benefit. A recipient of a graded disability benefit may have an income from work up to 40 per cent of the basic amount in addition to the income corresponding to her/his remaining capacity, without any reduction of the benefit. With higher income, the benefit will be reduced by a portion of the exceeding income. The degree of disability is not recalculated. Disability benefit is subject to taxation.
Sweden
The sickness compensation and activity compensation (Sjukersättning and Aktivitetsersättning) provide financial security in the event of a long-term reduction in workability. People aged 19–65 may receive the sickness compensation if their workability is permanently reduced due to chronic illness or disability. Activity compensation is awarded to people aged 19–29 whose workability has been reduced, due to illness or disability, by at least one quarter for at least one year. This benefit is always temporary.
Activity compensation and sickness compensation can be paid as full, three-quarter, half or one-quarter benefits. Activity compensation due to extended schooling is always paid as a full benefit. There is an income-related benefit and a guaranteed benefit. The income related benefit is linked to income from work. Guarantee benefit is available to people with little or no previous work income.
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