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Reduced earning capacity pensions

July 20, 2011

Employees can apply for a reduced earning capacity pension

Elderly couple and her holding crutches.

Employees who are only able to work a few hours a day because of their health can apply for a reduced earning capacity pension (Rente wegen verminderter Erwerbsfähigkeit). This can be paid out as a full or partial pension and adds to or takes the place of the previous earnings. To decide if there is an entitlement, the employee's earning capacity on the normal labour market is assessed together with the timeframe. This determines whether a partial or a full reduced earning capacity pension is paid. There is also a 'rehab first' rule: Applicants are assessed to see how much of their reduced earning capacity they can regain in medical or occupational rehabilitation so they can continue to earn their own livelihood.

Insured persons can claim a partial or full reduced earning capacity pension if they have completed the five-year general qualifying period and have paid compulsory contributions in employment or self-employment for at least three years before suffering the loss of earning capacity. Reduced earning capacity pensions are normally paid on a fixed-term basis.

Partial reduced earning capacity pension

An insured person can claim a partial reduced earning capacity pension (Rente wegen teilweiser Erwerbsminderung) if for the foreseeable future because of ill health or disability they cannot do more than six but can do at least three hours of paid work a day in conditions that are normal for the general labour market. The partial reduced earning capacity pension is not a full earnings replacement benefit as it is assumed that individuals receiving it will continue earning some of their livelihood themselves. If a person with reduced earning capacity is unable to use their remaining working capacity to earn income because they are unemployed, then a full reduced earning capacity pension is paid instead.

Partial reduced earning capacity and occupational disability pension

A partial reduced earning capacity and occupational disability pension (Rente wegen teilweiser Erwerbsminderung bei Berufsunfähigkeit) can be claimed by insured persons born before 2 January 1961 who are occupationally disabled.

An insured person is occupationally disabled if because of ill health or disability they are unable to do more than six hours of paid work a day in their existing occupation or in other work they can reasonably be expected to accept. Before deciding a pension claim, an assessment is done to see if the individual's health, knowledge and skills enable them to do at least six hours of work a day in another occupation. The other occupation must be one that the person can reasonably be expected to accept, taking into account their training, their career so far and the social status they have achieved.

Full reduced earning capacity pension

An insured person can claim a full reduced earning capacity pension (Rente wegen teilweiser Erwerbsminderung) if for the foreseeable future because of ill health or disability they are unable to do more than three hours of paid work a day in conditions that are normal for the general labour market. The full reduced earning capacity pension is a full pension; the amount paid is the same as for a severe disability pension claimed early.

Insured persons are assumed to have full reduced earning capacity if they already had full reduced earning capacity before completing the general qualifying period (five years) and continued to have full reduced earning capacity without interruption until completing the 20-year qualifying period. This applies in particular to employees in workshops for people with disabilities.