What is a disability pension?

A disability pension or reduced earning capacity pension is a form of pension that is paid in Germany if someone can no longer work or can only work to a limited extent due to health restrictions. It provides basic security and financial support for people who are no longer able to earn a living from their own employment due to illness or disability.

An entitlement to a reduced earning capacity pension can arise in the event of reduced earning capacity. A distinction must be made between occupational disability:

Occupational incapacity exists if the profession practiced can no longer be practiced due to an illness or disability. This is where occupational disability insurance comes into play following an individual assessment, provided it has been taken out privately. Occupational disability insurance is a type of private supplementary insurance.

Incapacity to work is deemed to exist if a patient is permanently unable to work for more than three hours a day, i.e. cannot earn an independent income. In this case, a disability limit can provide financial security.

A distinction is made between a partial and a full reduced earning capacity pension:
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• Full reduced earning capacity pension
  ‍If an insured person is unable to work more than three hours a day due to illness or disability, a full reduced earning capacity pension can be paid.
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• Partial reduced earning capacity pension
  ‍If an insured person is able to work between three and six hours a day, a partial reduced earning capacity pension is paid.
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Different rules apply to insured persons born before 01.01.1961: They receive a reduced earning capacity pension if they can work less than six hours a day in the profession they have learned or an equivalent profession.

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Prerequisites for a disability pension

The statutory reduced earning capacity pension is paid by German Pension Insurance. In order to receive a reduced earning capacity pension, you must therefore

• be insured for at least five years under the statutory insurance scheme (minimum insurance period, general waiting period).
  The period that immediately precedes the onset of reduced earning capacity applies here.
• have paid compulsory contributions for at least three yearsIn addition, you must not yet have reached the standard retirement age for the old-age pension.

Some basic medical requirements must also be met:

• Gainful employment cannot be restored even through rehabilitation measures were applied
• A medical necessity for the inability to work has been confirmed by an expert opinion

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Assessment of disability insurance claims?

As the provider of the reduced earning capacity pension, the German Pension Insurance checks whether the requirements are met. To assess the medical eligibility criteria, the pension insurance will request a medical report from your doctor. The necessary report will be drawn up by the social medical service.

If the report was drawn up before a rehabilitation measure, a rehabilitation report can replace this report. The pension insurance company will usually check again whether your earning capacity can be restored through medical or occupational rehabilitation.

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How much is the disability pension and for how long is it paid out?

The amount of the reduced earning capacity pension depends on the individual insurance contributions and the number of years of insurance. The reduced earning capacity pension can vary depending on the case. The duration of the pension payment is generally limited to a maximum of three years and must be extended in the event of further incapacity to work.In principle, the reduced earning capacity pension is calculated by multiplying the personal earnings points by the pension factor and the current value of the pension:
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Income points

The amount of earnings points is determined by the ratio of the insured person's income and the average income of all insured persons.
The average income in pension insurance for 2023 is 43,124 euros and corresponds to 1.0 earnings points. If your income is higher, your earnings points will also increase. If your income is lower, your earnings points will also fall.

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Pension factor

‍The pension factor is a fixed factor and determines the level of protection under the type of pension. The old-age pension has a factor of 1.0, as does the full reduced earning capacity pension. Pensions due to partial reduction in earning capacity have a pension factor of 0.5.

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Current pension value

‍The current pension value is redefined annually and corresponds to the monthly, unreduced pension that an average earner would receive. From 1.7.2023 to 30.06.2024, the current pension value in Germany is 37.60 euros.‍

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If a partial reduced earning capacity pension is still not enough, those affected can earn some extra income. However, the annual supplementary income is subject to maximum limits and can affect the amount of the reduced earning capacity pension.

The Deutsche Rentenversicherung has provided further detailed information on its website. The information deals with specific illnesses and provides structural help on what steps you can take. If you are unsure, you can also arrange a consultation.