Renée Blomberg: Who is granted Disability benefit in Sweden? Description of risk factors and the effect of the 2008 law reform

Disability benefit (förtidspension / sjukersättning) is an important part of Sweden’s social security system. It provides financial protection to individuals with permanent working ability impairments due to disability, injury, or illness. The benefit is managed by the Swedish Social Insurance Agency (Försäkringskassan) and is granted to individuals between 30 and 64 years old that have permanent working ability impairments. It can be granted full-time or part-time depending on the extent of the working ability impairment. Other social security programs exist for people in other age ranges and for those with temporary illnesses.

After old age pension, disability benefit was Sweden’s largest social insurance expenditure in 2010. The payments to about 440,000 individuals cost about 46.5 billion SEK [1]. Disability benefit accounted for roughly 22% of the total expenditures of the Swedish Social Insurance Agency [2] and corresponded to circa 1.4% of Sweden’s GDP [3].

The eligibility requirements for disability benefit were tightened June 1, 2008 to require that the working ability impairment be permanent. Prior to this it was possible to receive a temporary benefit for up to three years. The reform required moreover that in contrast to before, no other factors such as age or local labor market conditions can affect eligibility for the benefit.

Most of the individuals who are granted disability benefit continue receiving disability benefit until they turn 65 and receive old-age pension benefits or they pass away [4]. Since disability benefit is expensive and relatively permanent, it is important to understand who is granted the benefit. The goal of this paper is to investigate risk factors for the incidence disability benefit and the effects of the 2008 reform. This is the first study to investigate the impact of the 2008 reform on the demographics of those that received disability benefit.