Working while on pension
No income limits apply when receiving old-age pension. Several other types of pension are subject to various income restrictions, however.
- Pension accrues in the amount of 1.5% of annual earnings regardless of age and pension type.
- You must always file a separate application for pension that accrues for work performed while on pension.
- Because new pension accrues from work performed while on pension, pension insurance contributions will be withheld from your income.
- Because pension is taxed differently from employment income, you will require two tax rates: one for the payment of your current pension and one for your employment income
- Pension that has accrued for employment while on pension can only be paid after you have applied for it.
Income limits and accrual of pension
You can work as much as you want while you are on old-age pension. New pension will accrue to you until you turn 68 and even longer if you were born after 1957. You can continue working after the age of 68 but pension will no longer accrue to you.
Part-time pension and disability pension are subject to income limits which may not be exceeded.
If you are on disability pension and you exceed the income limit, you can leave your pension dormant.
Working while on partial early old-age pension
No income limits apply when on partial early old-age pension. You and your employer are free to agree how much or how little you wish to work. You do not need to stop working, or even cut back on your hours, but if you wish, you can work shorter hours or stop working altogether.
Working while on part-time pension
Part-time pension will be discontinued as part of the pension reform in 2017. If you have already retired on part-time pension, your pension will continue as before.
Switching from full-time to part-time work has been a condition for part-time pension. When working part time, you can earn between 35% and 70% of your standard full-time earnings. Your hours and earnings must decrease in the same proportion.
If your earnings from part-time work change by more than 15%, you should report the change to Keva so that the amount of pension may be re-calculated.
Working while on disability pension
You can work while on disability pension. If you are gainfully employed while drawing a pension, be sure to apply for the pension that has accrued to you for this work when your disability pension is converted into old-age pension and you stop working.
On full disability pension, you may earn 40% of your average earnings before going on pension or at least 834.52 euro (in 2020) per month.
Full disability pension may be converted into partial disability pension if your earnings are equal to 40–60% to your average standard earnings and the change in earnings is estimated to last for a year at least.
The preliminary decision on partial disability pension will inform you of your personal income limits on partial disability pension. While on partial disability pension, you may earn up to 60% of your average earnings before going on pension or at least 834.52 euro (in 2020) per month.
If your earnings exceed the income limit, your pension may be left dormant.
Leaving pension dormant
If you wish to try returning to work such and this will cause you to exceed your income limit, you have the option of leaving your pension dormant. Pension may be left dormant for a period of not less than three months and not more than two years. After two years, a dormant pension will be terminated.
Dormancy means that the payment of your disability pension is suspended for the duration of your employment. if your employment ends, payment of the disability pension is resumed upon request.
The option of leaving disability pension dormant is intended to support work try-outs without fear of losing the pension. The aim is to encourage people on disability pension to return to work that is more suited to them.
Disability pension may again be left dormant after a break of as little as one month.
The request for dormancy should be made well before starting work in order to avoid any clawback of pension.