One-time adjustment of disability pensions begins in 2010

The Employee Pension Act was modified at the beginning of 2005 so that the pensions of those who begin receiving disability pension before the age of 56 will receive, after the pension has been paid for five full calendar years, a one-time increase based on an age-dependent coefficient. The one-time adjustment is intended to ensure continuation of pension levels. Disability pensions will be adjusted for the first time at the beginning of 2010, at which time 5 years will have passed since the law was changed. The pension to be adjusted may, however, be of longer duration.

The amount of the adjustment will be based on the recipient’s age

The adjustment will only occur once, and it will be calculated according to the age of the pensioner at the time of the adjustment (in other words, his or her age on 1 January of the year the adjustment is applied). The adjustment can be received at the earliest at the age of 24, and it is not applied if disability pension begins after the year during which the recipient reaches the age of 55.

The full adjustment is 25% of the amount of the pension, and this will be received by 24- to 31-year-old disability pension recipients. The adjustment decreases by 1.0% per year of age, so a 55-year-old would receive a 1.0% increase. The one-time adjustment is calculated according to the amount of pension paid, and it increases the amount of the pension permanently.

Recipients need not apply for the adjustment. The Seafarer’s Pension Fund will notify recipients before the end of the year regarding the amount of the increase and the change in total pension amount.

One-time adjustment and survivors’ pensions

In addition to disability pension, it is also possible to receive a one-time adjustment to a survivors’ pension. If the deceased was drawing disability pension at the time of death, the one-time adjustment will be applied at the time when the deceased would have received the increase him- or herself, in other words, at the beginning of the year following that year during which the deceased’s disability pension or rehabilitation subsidy would have continued for five full, consecutive calendar years. The percentage of the adjustment will be calculated based on what the age of the deceased would have been on 1 January of the year the adjustment is applied.

If the deceased was not yet retired at the time of death, the one-time adjustment will be added to the survivors’ pension from the beginning of the year following the year during which the survivors’ pension has continued for five full calendar years. The amount of the adjustment depends on what the age of the deceased would have been as of 1 January of the year when the one-time adjustment is applied.

Recipients need not apply for the adjustment. The Seafarer’s Pension Fund will notify recipients before the end of the year as to the amount of the increase and the change in total pension amount.