Receiving disability pension benefits

Disability pension is calculated for a single person aged 50 who have been on the labour market for at least 25 years. This situation is calculated given four different wage levels of income from employment: 50, 75, 100 and 125 per cent of AW.

The compensation rates express the income from disability pension as a percentage of previous income from work.
In Denmark, Faroe Islands, and Iceland the disability pension is independent of any previous income. However, supplementary benefits are payable from agreement-based pension schemes, which have not been included in the calculation. In the other countries, disability pensions are calculated based on previous income from work.
Norway and Sweden place an upper limit on the disability pension, but Finland does not. In Norway and Sweden, the limit is AW 100, while in Finland it is above AW 125.

The increase in the compensation rate from 2017 to 2018 for Denmark is caused by a change in the calculation method of the supplementary private pension payments, which is now based on the distribution for 50-year-olds and not the whole group of early retirees. This means that the gross income of early retirees with income from earlier employment is higher based on the new calculation method.

In the figure we show the development of the compensation rate for those who earned 75 per cent of AW in recent years.

The compensation rate in the Faroe Islands has been decreasing since 2014 because pensions have not been regulated at the same level as wage developments. In Sweden the compensation rate has dropped by approximately 5 percentage points from the 2007 level, while it has increased by almost as much in Finland.

Please refer to the section on Disability benefits, for more specific information on rules in each of the Nordic countries.