Disability pension and artists

Most persons who are entitled to a disability pension have been unable to work for about a year before being able to claim the disability pension. Before a decision on disability pension is made, the applicant’s capacity for retraining and medical rehabilitation is examined. 

A disability pension can be paid as an earnings-related pension or national pension. A disability pension can also be paid for a fixed period of time, in which case it is known as a rehabilitation subsidy. 

A person receiving a disability pension can work within the income limits based on his or her income before losing his or her ability to work. Making art is also allowed if the person is entitled to a disability pension. 

A person entitled to a full disability pension may continue to make art professionally on the condition that his or her combined income is below 40% of his or her earlier and established level of income. For those entitled to a partial disability pension, this limit is 60%. Regardless of your personal income limit, you can earn up to EUR 922,42 pcm (2023) without affecting the amount of your pension. 

As a rule, the assessment of entitlement to a disability pension is based on all labour income accrued in exchange for work that is used to determine the amount of pension. For example, royalty payments are not considered remuneration for work that has been done, meaning that they do not affect the amount of pension. 

Exhibition payments and sales income related to pieces of art made before the disability are also excluded from the labour income affecting the amount of disability pension. In a situation like this, the income is based on work done before retiring due to disability, and labour income of this kind is not taken into account as labour income earned while claiming a disability pension. 

If an artist claiming disability pension also has simultaneous employment relationships or works as an entrepreneur in addition to being employed, the income from all sources as a whole is taken into consideration in the calculation of the labour income. 

For entrepreneurs and recipients of grants, labour earnings are considered to be the labour income the person would be considered to have under the Entrepreneurs Pensions Act and the Farmers Pensions Act. 

Earnings accrued while claiming disability pension are divided into periods. If earnings for several months are paid in one go, the accrued earnings are divided by the number of months during which the work was done. 

If you are claiming disability pension and take up work, you must contact Kela and your earnings-related pension institute. If your labour income regularly exceeds 40% of your average pre-disability income, your disability pension can be changed from full to partial, in which case your labour income may amount to 60% of your pre-disability income. You can also fully suspend the disability pension payments made by Kela for a period of time that you are working. You can suspend your disability pension payments for at least three months at a time and for no longer than two years. While your disability pension is suspended, you may be entitled to a disability benefit equivalent to the highest amount of disability benefit. 

If your earnings regularly exceed the income limit, your disability pension may be reviewed and your ability to work reassessed. This can be done, for example, at the request of your pension fund. You are not entitled to a full disability pension if your work earnings exceed 40% of your established average pre-disability earnings, unless you only exceed the limit temporarily. 

In terms of taxation, you will not lose your status as a professional artist directly as a result of claiming a disability pension. For tax purposes, ‘professional artist’ refers to a person who has shown that he or she regularly works in an artistic discipline. This can be demonstrated by, for example, an employment contract with an art institution, organising exhibitions, selling works of art, a degree from an art school or being a member of a professional art association. Disability pension alone does not change this status. 

In terms of taxation, what matters is whether you continue to make art professionally while claiming a disability pension. If you start making art as a hobby, you can no longer, for example, claim tax relief. 

If you claim disability pension, you can still apply for grants. However, it is worth keeping in mind that grants requiring MYEL insurance are taken into consideration in the calculation of labour earnings. You are required to take out a MYEL pension insurance if you have been awarded a working grant for at least four months and if the value of the grant is at least EUR 4 288 (in 2023). 

LINKS 

Kela – Disability pension and rehabilitation subsidy 

Työeläke.fi - When your working ability has been reduced