An artist’s ability to work can be weakened for many reasons. When working to secure a reasonable income is prevented by illness, fault, or disability, an artist may be able to retire on either full or partial disability pension.
Usually, approximately one year of being ill precedes retirement on the disability pension. The chances of occupational and medical rehabilitation are determined before a decision on disability pension is issued.
The disability pension can be received as an earnings-related pension or national pension. It can also be granted as a fixed-term pension, in which case it is referred to as a cash rehabilitation benefit.
A person with disability pension can work within the earning limits determined on the basis of the earnings prior to the disability. Also, working in art activities are not prohibited.
In addition, an artist with a full disability pension can continue his or her professional, artistic operations, provided that total earnings remain below 40% of the previously established earnings level. For a partial disability pension, the limit is 60%. Regardless of the personal earnings limit, you are allowed to earn EUR 743.83 per month without effects on the payment of the pension.
From a taxation viewpoint, an artist cannot lose his or her status as a professional artist directly on the basis of the disability pension. With regard to taxation, a professional artist is defined as a person who indicates that he or she is regularly active in the art sector. Proof of this might be, for example, an employment relationship with an art institution, display of works at exhibitions, selling of works, participation in training at an art-education institution, and membership in an art organisation. The disability pension in itself does not change this.
What is essential with regard to taxation is whether the artist continues the previous professional artistic work after retirement. If creating art is transformed into an activity resembling a hobby, it will no longer be possible to, for example, make tax deductions related to it.
A person with disability pension can still apply for grants. With regard to grants, however, it should be noted that the grants requiring MYEL insurance are taken into account in the earned income; MYEL insurance obligation is required for working grants with a term of at least four months in the amount of at least EUR 1,259.53 (EUR 3,778.59 on an annual level).
If an artist on disability pension is simultaneously in more than one employment relationship or is engaged in work regarded as an entrepreneurial activity while employed, the total amount of all earnings will be assessed in the calculation of earned income.
For a person engaged in the entrepreneurial activity who is a grant recipient, the earned income that should be confirmed for this person in accordance with YEL and MYEL terms will be considered to be his or her earnings.
Earnings accumulated while one is receiving disability pension are divided into periods. When earning payments are made in a lump sum covering several months, the number of earnings will be divided by the number of months during which the work was done.
In the assessment of eligibility for a disability pension, in principle, all such earnings as are used as the basis for determining pension and that is compensation for work will be taken into account. For example, copyright remuneration is not compensation for work performed and, as such, does not affect pensions. Also, exhibition remuneration related to works produced prior to the disability and proceeds from the sale of works are excluded from the earned-income figure for disability-pension purposes. These earnings are based on work that was performed before retirement, and such earned income is not taken into account as earned income created during the time of disability pension.
If earned income continuously exceeds the limit of 40% of one’s previous average earnings, it is possible to change the disability pension into a partial pension, in which case earned income may come to as much as 60% of the previous earnings. Also, the disability pension paid by Kela can be completely suspended for the duration of the work period. A pension can have this ‘waiting’ status for a minimum of three months and a maximum of two years. During that time, the artist may, on certain conditions, receive support in the amount of an increased disability allowance.
Earnings that exceed the earnings threshold and have been established as regular income can lead to adjustment of the disability pension and re-evaluation of the disability. This can be done, for example, on the initiative of the pension-fund personnel. The artist is not entitled to a full disability pension if earning more than 40% of the pre-disability established average income unless exceeding the earnings limit is temporary.
KELA – disability pension and rehabilitation subsidy
Työeläke.fi – when your working ability has been reduced
Eläketurvakeskus (in Finnish or Swedish)
KELA:n etuusohje: työkyvyttömyyseläke (pdf) (content in Finnish)