Disability pensions and work ability

The number of people retiring on disability pension has clearly decreased in the last few decades. Nevertheless, working life still ends prematurely for many due to disability. Work ability is increasingly supported in various ways to make it easier than before to continue working despite health problems.

Research into disability pensions and the support of work ability provides valuable information for the development of pensions and rehabilitation, as well as for a broader public discourse.

Disability retirement

Around 20,000 persons retire on a disability pension each year. Of them, around 5,000 retire on a partial disability pension. It is important to study disability retirement by population groups to be able to identify factors affecting disability retirement.

The incidence of disability retirement in Finland has clearly declined during this millennium. Over the past ten years, however, the decrease has been more moderate. The reduction has occurred across all diagnostic groups but has been notably steeper for pensions granted due to somatic diseases compared to those granted due to mental disorders.

In 2018 and 2019, the incidence of disability retirement in Finland increased. This was mainly due to an increasing number of applicants with a history of unemployment, suggesting the influence of the activation model for unemployment security that was in effect at the time. Since then, retirement on disability pensions has once again decreased.

Disability retirement has notably declined among individuals aged 45 to 59. Conversely, among those over 60, the incidence of disability retirement has increased. This trend is influenced by the rising minimum retirement age for the old-age pension as a result of the 2017 pension reform. A significant portion of disability pensions starting after the age of 60 are partial disability pensions. In younger age groups, retirement on a partial disability pension has also decreased.

The share of women receiving a disability pension has increased. At the beginning of the century, the incidence of disability retirement was higher among men than women, but currently, a clear majority of new disability pensioners are women.

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In the early 2000s, disability retirement due to mental disorders and somatic diseases decreased clearly. In recent years, however, the incidence of disability retirement due to mental disorders has increased. It follows that mental disorders play an increasingly greater role in disability retirement.

Currently, around one third of all disability pensions are granted due to mental disorders. Most disability pensions granted due to mental disorders begin as temporary pension. This type of disability retirement typically starts at a younger-than-average age. Already more than half of all disability pension recipients receive the pension due to mental disorders.

The spectrum of mental disorders is varied. Disability retirement based on depression and anxiety disorders has increased while disability retirement due to psychotic disorders has decreased.

Long term, disability retirement based on mental disorders has decreased in older age groups but increased steadily in younger age groups throughout the 2000s. It is not clear whether mental disorders among young people have increased or whether, for whatever reason, they lead to disability retirement more frequently than before.

Graph’s “Incidence of disability retirement based on mental disorders and other reasons in 2007 and 2016, %” data in accessible Excel file.

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Disability retirement is clearly more frequent among the older age groups. It increases particularly among those who are 50 or older. Nevertheless, disability retirement among the young has gained much attention and caused great concern since, unlike in the older age groups, disability retirement of the young has increased steadily throughout the 2000s.

Mental disorders are clearly the most common cause of disability pensions among young people. Underlying the growth in the disability retirement incidence among the young is an increase in the incidence of pensions granted due to mood disorders (depression and anxiety).

A considerable proportion of young people who begin receiving disability pensions are so severely affected by their illness that participating in working life is not a feasible expectation. Around half of those who transition to a disability pension between the ages of 18 and 29 receive only a pension from Kela, meaning they have no work history at all. Even among those covered by the earnings-related pension scheme, young recipients generally have far less work experience than their peers in the general population.

Most disability pensions of the young are granted as fixed-term disability pensions. Fixed-term pensions are less often converted to permanent pensions in the younger age groups compared to the older age groups. However, young people tend to be on fixed-term pensions for a longer time than older people.

Incidence of disability retirement based on mental disorders for under-35-year-old men / 10,000 person-years 

Diagnosis 2007 2011 2015 2019
Total 15.6 16.7 18.4 20.7
Depression 3.2 3.6 4.5 5.9
Mania and bipolar disorder 1.3 1.4 1 0.9
Anxiety 1.3 1.2 1.7 2.3
Psychotic disorders 7.1 6.6 6.6 6.8
Other mental disorders 2.7 4 4.6 4.7

Incidence of disability retirement based on mental disorders for under-35-year-old women / 10,000 person-years 

Diagnosis 2007 2011 2015 2019
Total 15.4 16.1 19.3 23.1
Depression 5.7 5.9 7.7 10.6
Mania and bipolar disorder 2 2 1.9 2.5
Anxiety 1.3 1.8 2.4 3.1
Psychotic disorders 4.3 4 4 3.7
Other mental disorders 2 2.3 3.2 3.3

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The incidence of disability retirement is not even in all socioeconomic classes. Manual workers run a clearly higher risk of disability retirement than upper non-manual employees. A low educational level and a low income are also associated with a higher risk of disability retirement. The higher risk of disability retirement of the lower socioeconomic classes is largely explained by physically more strenuous working conditions. The health of manual workers also tends to be poorer than that of upper non-manual employees.

However, in the 2000s, socioeconomic differences in disability retirement have narrowed as retirement has decreased more in the lower than in the upper social classes. Socioeconomic differences in disability retirement are larger in disability retirements caused by somatic illnesses than those caused by mental disorders.

Graph’s “The incidence of disability retirement in 2016, by disease group and educational level, %” data in accessible Excel file.

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Disability retirement is more common in the public than the private sector. In particular, the incidence of partial disability retirement is higher in the public than the private sector, while the difference in the incidence of full disability retirement between the sectors is small.

The differences in age and gender structure of public and private sector employees partly explain why the incidence is higher in the public sector. Public sector employees are older than private sector employees, and most public sector employees are women.

Sector differences in occupational structures, on the other hand, do not explain the differences in incidence. The differences in pension financing and the definition of disability may partly explain the higher incidence of disability retirement in the public sector.

Graph’s “Incidence of disability retirement for public and private sector wage earners, %” data in accessible Excel file.

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The number of people aged over 60 transitioning to a disability pension has increased sharply since 2017. This is due to the rise in the statutory retirement age agreed in the pension reform, which means that people can now retire on a disability pension at an older age than before. In 2025, 41 per cent of the new earnings-related disability pensioners were over 60.

Partial disability pensions are common among people aged over 60. The number of people over 60 transitioning to a partial disability pension has increased steadily since the early 2000s. At present, around one third of disability pensions granted to those over 60 are partial disability pensions.

The transition to disability pension among people over 60 is also influenced by the fact that, after this age, work capacity in the private sector is assessed only in relation to the applicant’s own occupation.
There is a marked peak in the number of individuals transitioning to disability pension at age 60.

A years-of-service pension can be granted to a person aged 63 or older who has had a long career in strenuous and demanding work and whose work ability has declined, but not to the extent required for a disability pension. However, take-up of this pension has been limited. Recipients of the years-of-service pension are typically men, persons with low levels of education and stable employment histories. In most cases, the underlying causes are musculoskeletal disorders.

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A person may be granted a disability pension if their ability to work has been reduced without interruptions for at least one year. As a rule, loss of income for shorter periods of disability is compensated with a sickness allowance. The longer the sickness allowance has continued, the higher the risk of disability retirement.

During the sickness allowance period, efforts are made to determine the need for rehabilitation and support a return to work. 70 per cent of those who have received a sickness allowance for the maximum limit of one year retire directly on a disability pension. Of the remaining 30 per cent, just over half apply for a disability pension but are not granted one at this stage. Just under half do not apply for a disability pension. They often return to paid employment. Those whose application for a disability pension is rejected often receive an unemployment benefit.

Unemployment and disability are often intertwined in many ways. It is common to receive unemployment benefits before retiring on a disability pension. Although rehabilitation is the primary alternative relative to disability retirement, vocational rehabilitation before disability retirement is rather rare and occurs mainly in the last few years before disability retirement.

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In 2025, 38 per cent of all disability pension applications were rejected. Most often applications are rejected because the applicant is not considered disabled enough or because the disability has not continued long enough. Granting a disability pension requires an uninterrupted period of disability that spans at least one year.

The share of rejected disability pension applications has increased in the 2000s. The increase in the rejection rate is broadly similar across different background factors, such as gender and level of education, and regardless of the medical condition on which the application is based. Changes in the characteristics of disability pension applicants therefore do not explain the rise in the rejection rate. However, without certain changes in the applicant profile – such as the growing proportion of applicants aged 60 and over – the rejection rate would have increased even more.

A large share of those whose disability pension applications have been rejected end up on a disability pension over the following years. Receiving an unemployment or sickness allowance is also common after a rejected disability pension application. Many rejected applicants have varied sources of income in the years following the rejection. This indicates that the applicants typically experience at least some degree of work ability problems, even if their disability pension application is rejected.

Graph’s “Retirement on a disability pension 1–4 years after a rejected disability pension application 2007–2023, %” data in accessible Excel file.

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Supporting work ability and continuing at work

Supporting continued working through vocational rehabilitation has increased in recent decades. During a period of a daily sickness allowance or a temporary disability pension (also called a cash rehabilitation allowance), efforts are made to facilitate a return to work through treatment or rehabilitation, even when the disability is prolonged. Partial disability pensions allow persons to continue working part-time despite difficulties with their ability to work.

Raising the employment rate and extending working lives are important objectives for society. Achieving these goals requires that the population’s ability to work remains sufficiently strong, enabling people to remain in employment even when they experience challenges in this area.

Finns’ self-assessed ability to work improved during the first decade of the 2000s, but since then, there has been no similar positive development. Among younger age groups, the perceived ability to work has even declined. These trends mirror the changes observed in the transition to disability pensions.

The proportion of people who consider themselves fully fit for work begins to decrease at around the age of 50. As the retirement age increases, it can be anticipated that challenges with the ability to work will become more common towards the end of people’s careers.

The number of working years completed in full health by those over the age of 50 has increased. How-ever, employment has also risen during periods when the ability to work has been limited.

The proportion of people with a partial ability to work has increased, particularly among the unem-ployed. Around half of them perceive themselves to have a reduced ability to work. Nevertheless, the largest group of people with a partial ability to work is found among the employed. Therefore, it is cru-cial to support both the unemployed and employed to help them maintain their ability to work and re-main in employment.

Graph’s “Share of persons with full, partial and no working ability by age and self-assessed work ability in 2022” data in accessible Excel file.

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A person with a reduced work ability is entitled to vocational rehabilitation funded by the earnings-related pension provider, provided it is determined that they are at significant risk of having to retire on a disability pension within the next few years.

The most common forms of vocational rehabilitation provided by pension providers are work trials either with one’s current employer or another, as well as retraining for a different occupation. Vocational rehabilitation organised by earnings-related pension providers is notably more frequent among women than men. The gender gap is particularly pronounced in rehabilitation initiated due to mental disorders. This type of rehabilitation is also more prevalent in larger organisations, which may be explained by their greater capacity to offer part-time work and other flexible arrangements compared to smaller employers.

Studies have not provided clear evidence of vocational rehabilitation significantly improving the ability to work or preventing retirement on a disability pension, at least not in the long term. As rehabilitation practices have been in transition in recent years, there is no research data available on the current situation regarding the impact of vocational rehabilitation.

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How well rehabilitation processes work has been studied mainly through interviews with both rehabilitation professionals and rehabilitees. Key factors for successful rehabilitation include adequate support and monitoring throughout the entire process. Moreover, both professionals and rehabilitees consider the following as essential for the success of rehabilitation:

  • careful planning and correct timing of rehabilitation,
  • rehabilitee’s motivation,
  • effective cooperation between the stakeholders involved in the rehabilitation,
  • the rehabilitee’s possibilities to impact the rehabilitation process,
  • taking the rehabilitee’s individual needs into account, and
  • supporting a return to work after rehabilitation.

According to studies, more attention should be paid to the period following work trials financed by pension providers and subsequent employment. A short work trial alone may not be sufficient to ensure a return to work.

Understanding the processes involved in returning to work and evaluating the outcomes of rehabilitation requires monitoring rehabilitees over a sufficiently long period.

According to studies, it is not meaningful to evaluate rehabilitation processes solely from the perspective of a single system, such as only from the perspective of rehabilitation under the earnings-related pension system. Many rehabilitees require services from various actors, either in turns or at the same time. There are challenges in the cooperation and division of responsibilities among different actors, and information does not always flow smoothly, for example, between the earnings-related pension system and employment services.

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A disability pension may be awarded either as a temporary disability pension (also called a cash rehabilitation allowance) or as a permanent disability pension. The disability pension is granted as a temporary pension if it is regarded possible that the employee’s work ability can be restored after the onset of the benefit. The share of temporary disability pensions of all new disability pensions has increased. Currently, clearly more than half of all new disability pensions begin as temporary disability pensions.

A large share of temporary disability pensions is later converted into permanent pensions. The share of rehabilitees returning to work has been fairly small. Around half of those who transitioned to a full or partial disability pension in 2018 were still receiving a partial disability pension four years later. Around 20 per cent were employed and a smaller proportion were unemployed. Nearly all those who returned to work had been working before starting to receive a temporary disability pension.

An increasing share of persons receiving a temporary disability pension has returned to work while a decreasing share has transferred to a permanent disability pension. In addition, an increasingly higher share of temporary disability pensions continues for more than four years.

There are notable differences between diagnostic groups when it comes to returning to work after receiving a temporary disability pension. In particular, the trend in returning to work among those who received temporary disability pension for mental disorders has been weak. Although they are transitioning to permanent disability pensions less frequently than before, the rate of return to work has hardly increased at all.

Graph’s “Labour market status 48 months after the start of a temporary disability pension among those who began the pension in 2018, %” data in accessible Excel file.

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The share of partial disability pensions of all new disability pensions has increased in recent years. Currently nearly every third earnings-related disability pension is granted as a partial pension. Most (around 80%) partial disability pension recipients continue working while drawing the pension. The average duration of a partial disability pension is just under three years, and most recipients work throughout the time they receive the pension.

Partial disability pension recipients differ from full disability pension recipients in many respects. Nearly 70 per cent of partial disability pension recipients are women, and many receive the pension due to musculoskeletal diseases.

Nearly half of all partial disability pension recipients are public sector employees, one-third are private sector employees, and about 5 per cent are self-employed. Less than one-fifth were unemployed before starting their partial disability pension. Most recipients have at least an intermediate educational level and one-third have completed higher education.

A transition from partial disability retirement to full disability retirement is relatively rare. During a four-year follow-up period, one third of the 20–58-year-olds who retired on a partial disability pension transitioned to a full disability pension while half continued drawing a partial disability pension. The rest either returned to work or became unemployed.

Probability of transition from partial DP to full DP and to other states during follow-up, %

Diagnosis Continued on partial DP Moved to full DP Moved to employment Moved to unemploy­ment Moved to old-age pension Other
All 52 33 9 3 1 1
Musculo­skeletal diseases 56 32 7 3 1 1
Mental disorders 41 37 16 5 1 0
Other diseases 53 33 8 3 1 3

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Retirement on a disability pension does not necessarily mean stopping work altogether. While drawing a pension, disability pension recipients may earn up to 40 per cent and partial disability pension recipients up to 60 per cent of their established average pre-disability earnings.

When a disability benefit is granted in the form of a partial disability pension, the individual is considered to have some work ability left and to be able to continue working while drawing a partial disability pension. However, the individual is not required to work. Nearly 80 per cent of individuals on a partial disability pension work while drawing the pension.

The work ability of individuals on a full disability pension, on the other hand, is much weaker than that of individuals on a partial disability pension. Hence, working while drawing a full disability pension is less common. Of the recipients of a full disability pension, an ample 10 per cent work while drawing the pension. The majority of those receiving a partial disability pension continue to work throughout the entire duration of their pension.

Women, those with a higher education and those recently retired on a disability pension work more often while receiving a pension than men, those with a primary education and those who have received a disability pension for a longer time. Working while receiving a disability pension is also more common among public sector employees and those with a long working life than among private sector employees and those with a shorter working life.

Graph’s “Share of disability pensioners who earned at least €500 in 2023, by level of education, %” data in accessible Excel file.

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In 2024, the average total pension of all disability pensioners was approximately 1,300 euros per month. This is clearly less than what old-age pensioners received. Disability pensioners often have a meagre income.

Disability pensions have decreased slightly on average in the 2000s. This is because disability pensioners are younger than before and have retired on a disability pension at a younger age than before.

The share of disability pensioners receiving a national pension only has increased while the share of those receiving an earnings-related pension has decreased. The guarantee pension that was introduced in 2011 has improved the situation for many disability pensioners since the proportion of disability pensioners who receive this pension benefit is large.

There are clear differences in income levels and financial satisfaction among groups of disability pension recipients. Those with a higher education, those who perceive their health to be better, those who live in a shared household, or those who continue to be in employment are more satisfied with their financial situation than those with a lower education, those who perceive their health to be poorer, those who live alone, or those who are not in employment.

The income of disability pensioners remains lower than average also in old-age retirement since the disability pension is converted into an old-age pension of the same amount when the individual reaches their old-age retirement age. Old-age pensioners with previous disability pension experience more economic difficulties in covering, for example, housing and health care costs than old-age pensioners without a previous disability pension.

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