Why has the number of disability pensioners decreased?
The number of disability pension recipients has dropped by more than 25 per cent between 2010 and 2020. For the main part, this is because many of the babyboomers have transitioned from a disability pension to an old-age pension. At the same time, the number of starting disability pensions has declined. This is observed in a research article by the Finnish Centre for Pensions.
In 2010, disability pension recipients numbered around 270,000 persons; in 2020, they were less than 200,000.
The number of terminated disability pensions is explained by a large number of baby boomers reaching their retirement age and transferring to an old-age pension.
“In addition, the share of fixed-term disability pensions has increased throughout the 2000s, which explains, to some extent, the growth in terminated full disability pensions. Disbility pensions ending in death have decreased”, says Senior Researcher Mikko Laaksonen (Finnish Centre for Pensions).
The number of starting disability pensions has also decreased during the review period, which explains about 25 per cent of the decrease in the number of disability pension recipients.
Younger disability pension retirees often receive a national pension
As a rule, the babyboomers who have transitioned from a disability pension to an old-age pension have accrued and received a disability pension from the earnings-related pension scheme. On the other hand, young disability pension recipients usually receive their disability pension partly or in full from the national pension scheme. At the same time, the number of disability pension recipients who receive the pension based on mental disorders has incrased.
“The national pension scheme plays an increasingly important role for the income of disability pension recipients”, says Economist Juha Rantala (Finnish Centre for Pensions).
All in all, the number of disability pension recipients has clearly decreased since so many have transitioned from a disability pension to an old-age pension. Although the number of young disability pension recipients has increased somewhat, the trend is not nearly enough to offset the opposite trend among the older generations.
The article (in Finnish) was published in the journal Yhteiskuntapolitiikka [sociopolitics].
