Reduced earning capacity pensions as an instrument for activation? Return to work after a reduction in earning capacity
Protection from reduced earning capacity is one of the classic tasks of the welfare state. Under German pension law, reduced earning capacity pensions are generally limited in time. This reflects the assumption that a reduction in earning capacity would normally only be temporary. The reform of the system in 2001 strengthened the statutory goal of return to work.
This article examines how often the transition from disability benefits to employment is successful before the age of 60 and for whom. The results based on social security data show that 12.6 per cent of formerly incapacitated persons are back in employment within twelve months after the pension expires; a further 8.7 per cent are unemployed.
The overwhelming majority drops out of observation when they reach the age of 60; in this case, it is highly probable that they will receive a permanent pension. Younger people, in particular, are successful in transitioning to a situation close to employment (employed or unemployed). Even after the end of reduced earning capacity benefits, employment histories remain often unstable. An effect of the 2001 reform is not discernible.