Earning disability pension. When everything suddenly changes.

Your earning disability pension supplements the disability benefits paid under the first pillar (OASI/IV) and those paid by your pension fund. That is why you take out earning disability insurance on the basis of these benefits. Your advisor can help you find the optimum pension amount.

If your earning disability is 70% or higher, you are entitled to receive the full earning disability pension.

If your earning disability is 25–69%, you will receive a reduced pension – depending on your actual degree of incapacity.

If, as a result of an illness or accident, you are only able to work reduced hours or not at all, this means you are partially or fully unable to earn. This is often referred to simply as disability. That means you can no longer work in your previous profession at all. You lose part or all of your income because you can no longer perform your accustomed job.

That doesn’t apply, for example, if you become unemployed. In this case, you have no work at the moment, but you are still in principle able to earn an income. Your unemployment benefit is your temporary replacement income in such cases until you find a new job.

The same applies when your doctor writes you off sick for a certain period due to health reasons. We refer to this as temporary incapacity to work. The doctor’s certificate enables you to continue receiving your agreed contractual salary from your employer.

From the point of view of taxation, pillar 3a is primarily intended to fund your retirement, which makes it an interesting savings vehicle. You can deduct your annual premiums from your taxable income. This is permitted up to the maximum amount fixed by the federal government. The payout is then taxed once, at a separate tax rate.

As no capital is accumulated under earning disability insurance, the premiums for it are more attractive. If you haven’t yet utilized the maximum amount permissible under pillar 3a, you can take out earning disability insurance under that pillar and benefit from the tax advantages offered.

If you have already used up pillar 3a for pension insurance, you can take out your earning disability insurance under pillar 3b.

Homemakers often earn no income. If that is the case, disability can quickly lead to financial difficulties. It may be necessary, for instance, to pay for someone to help with the housework or look after the children. That is why earning disability insurance is a sensible option for those managing a household.

Students don’t usually earn anything either. If they are disabled, this can restrict their career prospects for the rest of their lives. The same goes for income growth. In this case, too, earning disability insurance can mitigate the financial consequences. Helvetia enables young people, too, to protect themselves against the effects of earning disability.