Share of rejected disability pension applications grown rapidly among the unemployed

The share of rejected applications for a disability pension by unemployed applicants has risen in one decade from 24 to 38 per cent. The share of rejections has grown more rapidly among the unemployed than the rest of the disability pension applicants.

The share of rejected disability pension applications of all disability pension applications has risen from 20 to 28 per cent between 2007 and 2016. The majority of the disability pension applications were for a full disability pension.

According to Mikko Laaksonen, Senior Researcher at the Finnish Centre for Pensions, the share of rejections grew particularly fiercely among the 34–54-year olds, the long-term unemployed, women with mental health problems and those who applied for a full disability pension.

“Almost one third of all applicants had been unemployed before applying for a disability pension, and one fifth had been unemployed for more than six months. The figure for unemployed applicants was the same in 2016 as in 2007,” Laaksonen says.

Share of rejections small among upper-level office workers

Slightly more than half of the applicants for a disability pension were lower-level office workers or blue-collar workers. The share of rejections among the lower-level office workers has risen in a decade from 20 to 25 per cent and among blue-collar workers from 20 to 27 per cent.

The share of rejections is the smallest among upper-level office workers. Yet their share has also risen, from 15 to 19 per cent.

Growth in number of rejections not due to change in structure of applicants

Based on this study, changes in the structure of applicants (such as gender, age, socioeconomic status, employment status, diagnosis or pension benefit applied for) have a minor effect on the growth in the share of rejected applications. No single structural factor has had a significant effect on the growth of the share of rejected disability pension applications.

“The effects of changes in age and type of pension benefit were, in fact, the opposite. If the age structure had not changed between 2007 and 2016, the share of rejections would actually be higher than it is currently. Similarly, if the applications for a partial disability pension had not become more common after 2007, the share of rejected disability pension applications would be even higher now,” Laaksonen explains.

The most common reasons for applying for a disability pension are mental health problems and musculoskeletal diseases. The underlying diseases for disability pension applications have not changed considerably between 2007 and 2016.

Improved ability to work or decision practices of pension providers possible affecting factors

According to Laaksonen, the growing share of rejected disability pension applications may be explained by the applicants’ improved ability to work or the stricter decision practices of the pension providers. Both factors are difficult to measure in exact terms. Data on the development of the working-age population’s improved health is partly compatible with the growth in the share of rejected applications.

“What’s positive is that the number of disability pension applicants has reduced quite a lot over the past ten years. The reduced number of applications usually speaks of an improved ability to work and successful rehabilitation within the earnings-related pension scheme. In 2007, a total of 29,400 persons applied for a disability pension. In 2016, that number had gone down to 22,900 persons,” Laaksonen says.

On the other hand, Laaksonen points out, the rising share of rejected applications may also reflect the growing social demand to continue working regardless of health problems.

“Society increasingly aims to make use of the remaining ability to work. It may have had an effect on the rising share of rejected disability pension applications,” Laaksonen estimates.

Mikko Laaksonen’s and Heidi Nyman’s article Työkyvyttömyyseläkkeiden hylkäysosuuden kasvu 2007 – 2016 (Growth in share of rejected disability pension applications in 2007-2016) was published (in Finnish) in Yhteiskuntapolitiikka (public policy) on 30 November 2018.

More information

Mikko Laaksonen, Senior Researcher, mikko.laaksonen(at), phone +358 29 411 2156

Statistics on disability pension applications