Disability or loss of earning capacity: what next?

Definition of loss of earning capacity:

• Long-term absence from work: someone who has lost earning capacity is a person who, due to an illness or accident, is no longer able to work or can only work to a limited extent – either permanently or for an extended period of time.
  
  
• Loss of income: if you are unable to work, you lose all or part of your income from employment or self-employment. 
  
  
• Difference from incapacity for work: anyone who is temporarily unable to carry out their work is deemed incapable of work. Loss of earning capacity, by contrast, is defined as a long-term or permanent impairment of the employee’s capacity for work that results in a loss of income. The difference between incapacity for work and loss of earning capacity is decisive for insurers.
  
  
• In Germany, for example, people often speak of occupational invalidity – but this is not the same as loss of earning capacity. While occupational invalidity is defined by you no longer being able to carry out your current job, loss of earning capacity means that you are no longer able to carry out an acceptable job in the relevant labour market, regardless of the profession in which you are working.

Basic principles of disability insurance in Switzerland:

• Aim of disability insurance: disability insurance is a state-run social insurance scheme. It is intended to help people with health impairments return to work or provide financial security.

• Who is insured? In Switzerland, everyone who lives or works here – including children – is insured.

• Benefits: disability insurance provides support in the form of reintegration measures, pensions, medical aids and medical care if disability is on the horizon or has occurred.

• Monthly payment: if you are permanently unable to work due to illness or accident, you will receive a pension. to partially replace the lost income from employment or self-employment.

• Amount of the pension: the amount depends on the degree of loss of earning capacity, your previous income and your insurance duration. In the event of full disability, the maximum disability pension is CHF 2,520 per month (as at 2025). 

• You can protect yourself individually against further financial burdens with additional private insurance policies, such as our income protection insurance.

Prerequisites for disability benefits:

• Duration of impairment: in order to receive a disability pension, it must be foreseeable that the health impairment will last for at least one year.  It is possible to take engage with job retention or reintegration measures before this point. These pre-requisites also apply to people who work part time and those not in gainful employment.

• Integration: in accordance with the principle of “reintegration before a pension”, the disability insurance first checks whether professional reintegration is possible. Only then will a decision be made on a pension.

• Calculation of disability: the level of disability is calculated on the basis of a comparison between your previous income and the income that is still possible with your health impairment(s). For people not in gainful employment, the calculation can also be carried out by means of an activity comparison; for part-time workers, it can be carried out by means of a combination of an activity comparison and an income comparison. A partial pension is payable from a degree of disability of 40%, and a full pension from 70%.

• To make sure you don’t miss out on any benefits, you should register with the disability insurance as soon as possible; make sure to do so no later than six months after the onset of your loss of earning capacity.

Protection in the event of disability:

• State insurance: disability insurance (Invalidenversicherung, IV) covers part of the benefits in the event of disability, such as pensions or rehabilitation measures.

• Private insurance with Generali: income protection insurance can close many of the gaps. This policy pays a loss of earning capacity benefit at periodic intervals. You will receive a quarterly pension in arrears if you are no longer able to work due to an illness or accident.

• Difference in benefits in the event of illness and accident: in the event of illness, the first and second pillars together often only replace around 60–70% of your last salary. In the event of an accident, by contrast, around 90% of your last salary is covered. This is precisely why private income protection insurance that covers you in the event of illness is particularly important.

• In the event of illness or death: private insurance is particularly useful if you have a family or want to protect an income. It also helps if the disability or loss of earning capacity is caused by illness – not just by an accident. You can also protect your family in the event of death.