An accident, burn-out or chronic back problems, no one is immune from health problems. Statistically, “one in four employees has to give up their job prematurely or retire completely from working life for health reasons,” according to the German Pension Insurance. In addition to health concerns, the question then often arises of how to compensate for the loss of wages. From a purely legal point of view, there are major differences between the terms disability and occupational incapacity, which are particularly significant with regard to any state or private benefit claims.
Definition
Statistically, “one in four employees has to give up his or her job prematurely or retire from working life altogether for health reasons,” according to the German Pension Insurance Fund. Incapacity to work is precisely defined in Section 43 of the Sixth Book of the German Social Code (SGB VI): “Fully incapacitated persons are insured persons who, due to illness or disability, are unable to be gainfully employed for at least three hours a day under the usual conditions of the general labor market for an unforeseeable period of time.”
Anyone who is able to pursue a professional activity for between three and six hours a day is partially incapacitated for work according to this definition. Anyone who is able to work more than six hours a day is not considered to be incapacitated. “Not foreseeable time” means a span of more than half a year. Incapacity for work or reduction in earning capacity are not identical with occupational disability. The latter only means that a person is no longer able to work in the last profession practiced or learned for health reasons: If a driving instructor can no longer give driving lessons due to paralysis, he could theoretically work as a coach, for example. Consequently, he or she is not incapacitated for work. What is important in the definition of reduced earning capacity is the theoretical possibility of performing another activity. Practical opportunities on the labor market are unimportant. In § 43 of the SGB VI it says: “… the respective labor market situation is not to be taken into account.”
Legal significance
Consequently, persons incapable of working who were born after January 1, 1961, are only entitled to a statutory reduced earning capacity pension if, due to the health condition, they cannot perform a single occupation on the German labor market for at least six hours a day for more than six months. In addition, with some exceptions, there must have been membership in a compulsory insurance scheme for the last five years and contributions must have been paid for three years.
State pension and basic income support
Even if eligible, the statutory reduced earning capacity pension is not high: the full rate is between 30% and 38% of the last gross income if you are able to work less than three hours. The half rate is between 15% and 19% of the last gross salary if you are able to work less than six hours but more than three hours per day. Taxes and health insurance contributions may be deducted. If you are below the subsistence level, you can apply for basic income support in accordance with Chapter 4 of the Twelfth Social Code (SGB XII). The prerequisite is that you and your partner do not have any assets from which you can cover your living expenses. Those entitled to basic security are assigned to a standard needs level and receive between €234 and €399 per month (as of January 1, 2015), plus expenses for housing and heating, additional amounts if necessary, and exemption from pension and mandatory insurance contributions. In most cases, this results in a higher three-digit figure. Regular, statutory old-age pension claims do not exist until a corresponding age has been reached. Here, too, high payments are not to be expected, especially if one has not participated in working life for a long time. According to the German Insurance Association. (GDV), in 2014 newly retired persons received sums in the three-digit range on average per month, according to German pension insurance statistics: for men who retired in 2014, this amounted to €975 per month, and for women, €533. Detailed information on the legal framework regarding reduction in earning capacity is provided by the statutory pension insurance, the social welfare offices and, of course, the social security codes.
Private provision: the occupational disability insurance
Occupational disability often entails financial hardship, especially if you were previously self-employed and not compulsorily insured. Therefore, depending on the circumstances of life, private provision makes sense:
For example, daily sickness allowance agreements are possible as an additional component of private supplementary health insurance – this means that you receive a pre-agreed daily rate if continued payment of wages by your employer or health insurance fund ceases. However, this option cannot be regarded as a permanent solution, but primarily as a bridging measure until the insured person resumes working. Accident insurance is also not a pension substitute: a one-time sum is paid out. And only if the occupational disability was caused by the accident. On the other hand, occupational disability insurance offers more comprehensive protection, guaranteeing monthly payments in an individually agreed amount until retirement age. With private insurances, however, one should generally check all contract details carefully: In the case of occupational disability insurance, for example, the clauses of “abstract referral” or the “examination of previous occupations” should be excluded, because then the insurer cannot refer to other theoretically feasible occupations in the event of an emergency. Also, a 6-month prognosis should be agreed upon, so that one has pension rights early on and not only when three years have passed. An overview of a wide variety of insurance policies, important contract details, as well as free and non-binding comparison options is provided by the online comparison portal tarifcheck24.com.
Most frequent causes for occupation and/or incapacity for work
Already in 2013, mental, respectively nervous diseases overtook the former number 1 of occupational disability – according to a Statista study: more than a quarter (28.67%) therefore dropped out of working life. 22.65% could no longer work due to diseases of the “skeletal and musculoskeletal system”, 15.07% due to cancer. Accidents were the cause for one tenth (10.14 %), and “cardiovascular diseases” for 7.96 %. Some occupations seem objectively riskier than others; welders, roofers or lumberjacks, for example, are exposed to great physical stress and operate dangerous equipment. However, this does not take into account typical office illnesses such as burn-out, stress or back problems, which now account for more than half of all causes of occupational disability. Of course, you hope to stay healthy yourself, but even a healthy lifestyle doesn’t always protect you from an emergency. It is therefore advisable to find out about pension models in good time. If you decide to take out a private pension, the younger and healthier you are when you take out the policy, the lower the premiums.
