Receiving disability pension benefits
Comparing income groups
To compare the compensation rates across the Nordic countries, the level of disability pension is calculated for a single person aged 50 who has been in the labour market for at least 25 years. The calculation is made for four different wage levels of income from employment: 50, 75, 100 and 125 per cent of the average wage (AW).
The compensation rates represent the income from a disability pension as a percentage of previous income from employment.
In Denmark, the Faroe Islands, and Iceland, disability pensions are independent of prior income. However, supplementary benefits from agreement-based pension schemes, which are not included in this calculation, may also be payable.
In the other Nordic countries, disability pensions are determined based on previous income from work.
Norway and Sweden impose an upper limit on disability pensions, whereas Finland does not. In Norway and Sweden, the limit is set at 100 per cent of the AW, while in Finland it exceeds 125 per cent of the AW.
The increase in Denmark’s compensation rate from 2017 to 2018 is due to a change in the calculation method of supplementary private pension payments. The new method is based on the distribution for 50-year-olds rather than the entire group of early retirees. As a result, the gross income of early retirees with previous employment income is higher under the revised calculation method.
Comparing compensation rate
The figure shows the development of the compensation rates for people who earned 75 percent of the AW before receiving disability pension.
The compensation rates have been relatively stable in recent years for most of the Nordic countries. However, since 2018, there has been a slight decrease in the rate in the Faroe Islands, making Denmark’s compensation rate the highest. In Sweden, the compensation rate has increased and, as of 2023, is approximately on par with the rates in Norway and Finland.
Please refer to the section on Disability benefits, for more specific information on rules in each of the Nordic countries.