A new model would allow greater flexibility in combining employment and pensions
A more flexible framework is being proposed for disability pensioners, enabling them to combine work and receiving a pension more easily. This flexible model is currently progressing through the Finnish Parliament and is expected to come into effect at the beginning of 2028.
Many disability pensioners are able, willing, and have the opportunity to work.
The new model aims to encourage people to work when their health so permits, and to remove barriers to employment. As its name suggests, the flexible model is more adaptable than the current system. In future, pension payments will no longer be suspended entirely if earnings temporarily exceed the set limit, explains Development Manager Marjukka Hietaniemi from the Finnish Centre for Pensions.
Currently, pension institutions suspend disability pension payments if earnings exceed the income threshold for at least three consecutive months. The intention is for the new flexible model to replace these temporary rules.
How would the flexible model work in practice?
Under the new model, each disability pensioner would have a personal income safeguard threshold. Earnings below this threshold would not affect the pension amount received. This threshold would be calculated in the same way as the current earnings limit for disability pensions.
The safeguard threshold could be exceeded in certain months without impacting the disability pension immediately. Exceeding the threshold would be permitted up to a so-called flexible allowance, which is an annual sum equivalent to twice the monthly safeguard threshold.
If a person’s earnings exceed their monthly safeguard threshold, and the total annual excess exceeds the permitted flexible allowance, their monthly pension will be reduced by the amount of the excess. A new flexible allowance will be available at the start of the following year.
If a person’s earnings exceed the safeguard threshold for 24 consecutive months, their partial disability pension will be discontinued. Similarly, if the earnings of a person receiving a full disability pension surpass the safeguard threshold for 12 consecutive months, their pension will change to a partial disability pension. If the excess continues for a further 12 months, the pension will be terminated entirely.
The reform progresses
On 16 April 2026, the Finnish government submitted its proposal to Parliament. The law is expected to come into effect at the start of 2028.
The flexible model will apply to both disability pensions and partial disability pensions paid by earnings-related pension institutions, as well as to disability pensions paid by Kela. Additionally, it would cover the guarantee pension paid by Kela to disabled individuals and the years-of-service pension paid by earnings-related pension institutions.
The flexible model is based on the government programme’s commitment to coordinating disability pensions and employment income. The intention is to replace the current temporary legislation, which remains in force until the end of 2027, with permanent regulations.
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