Private disability pension and sickness benefit at the same time: How to secure your income twice
18.05.25
7
Minutes
Katrin Straub
Managing Director at nextsure
Can you receive a private occupational disability pension and sickness benefit at the same time? Many policyholders are unsure how these benefits interact with each other. This article explains and shows you how to avoid financial disadvantages.
The topic in brief and concise terms
Private disability pension and statutory sickness benefit can generally be received at the same time and in full.
When it comes to private sickness daily allowance, caution is advised: payments are often suspended or offset when an occupational disability pension is being received.
An incapacity for work clause (AU clause) in disability insurance can speed up financial support before occupational disability has been finally assessed.
Quick Facts: The most important information about occupational disability pension and sickness benefit at a glance
The receipt of a private occupational disability pension and statutory sick pay is generally possible at the same time. Your health insurer is usually not allowed to reduce statutory sick pay just because you receive a private occupational disability pension. A ruling by the Trier Social Court has confirmed this practice since 2011.
The position is often different with private daily sickness allowance. Contracts often stipulate that payments stop in the event of occupational disability. You should therefore check your contractual terms carefully to avoid surprises. The occupational disability pension itself is a benefit from a fixed-sum insurance policy and is therefore not reduced by other income such as sick pay. However, note that if you are insured under the statutory health insurance system, contributions to health and long-term care insurance are payable on your occupational disability pension; these amount to around eighteen per cent. Careful planning of your financial protection is therefore essential. This section provides you with the key facts for a quick overview.
Statutory sickness benefit and private disability pension: a combination without deductions?
Many employees wonder whether statutory sickness benefit is reduced if a private disability insurance pension is also paid. The good news: in most cases, no. Statutory sickness benefit is a wage replacement benefit under statutory health insurance (GKV). You receive it after the employer's six-week continued pay period has ended. It amounts to seventy per cent of gross income, but no more than ninety per cent of net income.
The private disability insurance pension, by contrast, is a benefit under a private-law contract. It secures your standard of living if you can no longer work in your profession to at least fifty per cent. A ruling by the Social Court of Trier in 2011 (case number S 5 KR 40/11) made it clear that the private disability insurance pension must not be offset against statutory sickness benefit. So you can receive both benefits in full at the same time. This provides important financial support in a difficult phase of life. You can find more on the topic of disability insurance pension as income in our blog. The clear separation of the systems safeguards your entitlements. The next question often concerns private sickness allowance.
Private sickness daily allowance: Different rules apply here than for statutory sick pay
While statutory sickness benefit usually continues without reduction alongside the occupational disability pension (BU pension), the situation is often different with private daily sickness benefit (KTG). KTG is a private supplementary insurance that is particularly relevant for self-employed people and high earners above the income threshold. Many KTG policies contain clauses providing for benefits to cease as soon as occupational disability is established and a BU pension is paid. This can lead to problems, especially if the BU pension is granted retrospectively. In such cases, KTG insurers not infrequently reclaim sickness benefit already paid out. Look out for clauses excluding repayment claims in your KTG policy.
However, some insurers also offer tariffs in which KTG is paid in parallel with the BU pension, at least for a transitional period. It is therefore crucial to check the exact terms and conditions of your daily sickness benefit policy. Here is a brief checklist of what you should pay attention to:
Check the definition of occupational disability in the KTG policy.
Clarify whether offsetting or cessation of KTG payments is provided for in the event of BU benefits.
Note rules on retrospective granting of BU benefits and possible KTG repayment claims.
Find out about any deadlines for reporting occupational disability to the KTG insurer.
These points will help you avoid pitfalls. Coordinating both insurance benefits is complex, but manageable.
The incapacity clause (AU clause): A bridge to occupational disability pension
A so-called incapacity for work clause (AU clause) in disability insurance can provide an important financial bridge. It already pays out if you have been continuously signed off sick for a certain period, often six months (a doctor’s medical certificate of incapacity is sufficient). The advantage: you receive benefits in the amount of the agreed disability benefit, without the often lengthy assessment of incapacity for work having to be completed first. The benefit period under the AU clause is usually limited to eighteen to thirty-six months. The AU clause significantly speeds up financial support.
Please note that benefits from the AU clause and sickness daily allowance can also affect each other. Some sickness daily allowance insurers stop their payments as soon as benefits from an AU clause are paid. Be sure to clarify this with your insurers. The AU clause is particularly interesting for self-employed people who are not entitled to statutory sickness benefit. Find out more about the difference between sickness benefit and sickness daily allowance. The exact conditions of the AU clause vary depending on the provider and tariff. Next, we will look at the deductions from your disability benefit.
Deductions from occupational disability pension: What you need to bear in mind with contributions and taxes
If you receive a private disability pension, it is not available in full. Those insured under the statutory health insurance system must pay contributions to health and long-term care insurance from their disability pension. These currently amount to the full contribution rate, i.e. employee and employer shares combined, which can make up around eighteen per cent of the pension (fourteen per cent general contribution rate plus individual supplementary contribution and around three point four per cent for long-term care insurance for childless people aged twenty-three and over). Be sure to factor these deductions into your planned disability pension amount.
Tax aspects also need to be taken into account. The private disability pension is taxed using the so-called earnings portion. Its amount depends on the age at the start of the pension and the term of the pension. In the case of a classic disability pension, this earnings portion is often relatively low, so the tax burden remains manageable, provided there are no other high incomes. A disability pension of, for example, two thousand five hundred euros per month often results in no tax payment or only a small one for a single person without other income. The situation is different if the disability cover was taken out as part of a basic pension (Rürup pension) or a company pension scheme; different tax rules apply here. Find out about the tax liability of the disability pension. These financial aspects are crucial for your overall planning.
Expert depth: Understanding legal fundamentals and current rulings
The legal basis for sickness benefit can be found in Book Five of the Social Code (SGB V). Section 47 SGB V, for example, governs the amount and duration of sickness benefit. By contrast, occupational disability in private insurance is defined in the respective insurance conditions, often based on Section 172 of the Insurance Contract Act (VVG). An important distinction is between incapacity for work (AU) and occupational disability (BU). AU is usually a temporary condition, whereas BU represents a likely permanent impairment of the ability to perform the occupation most recently carried out to less than fifty per cent.
The aforementioned judgment of the Trier Social Court (case no. S 5 KR 40/11) of 26 May 2011 is central to the question of the simultaneous receipt of sickness benefit and a private BU pension. It states that offsetting the private BU pension against statutory sickness benefit is not permissible. This judgment significantly strengthens the rights of insured persons. However, this judgment does not apply directly to policyholders with private health insurance who are entitled to sickness allowance; here, the contractual terms are decisive. If anything is unclear or there are disputes with the insurer, advice from experts may be useful. Knowing these basics helps you assess your claims more accurately. Now for specific recommendations for action.
To ensure you are optimally protected in the event of a claim and to avoid financial disadvantages from drawing private disability insurance income and sickness benefit (or daily sickness allowance) at the same time, you should bear a few points in mind. A careful review of your existing contracts is the first step. Pay attention to the exact definitions of incapacity for work and occupational disability. Clarify the conditions for any possible offsetting or set-off of benefits. Early and transparent communication with both insurers is often helpful.
Here are some specific recommendations for action:
Make sure that the amount of your disability pension is sufficient to cover your living expenses even after deduction of health insurance contributions and taxes (at least eighty per cent of net income).
Check your daily sickness allowance policy for clauses reducing or suspending benefits when you receive a disability pension.
When taking out disability insurance, look for a good incapacity-for-work clause for faster initial benefits.
Keep a complete record of all doctor visits, diagnoses and medical certificates.
Notify your insurers in good time of any possible occupational disability and any longer period of incapacity for work.
If necessary, seek support from specialist advisers or solicitors specialising in insurance law, especially when applying for benefits.
Our expert tip: Have your contracts reviewed regularly, for example every five years, or whenever there are major changes in your life (marriage, children, job change), and adjust them if necessary. The right strategy secures your income in the long term.
nextsure: Your partner for tailored protection solutions
The topic of private disability income and sickness benefit at the same time is complex. As a digital insurance portal, our mission at nextsure is to offer you tailored, easy-to-understand insurance solutions. We help you make sense of the insurance maze and secure your financial future in the best possible way. With our focus on niche products and full digitalisation, we offer you a modern and efficient way to access your cover. We analyse your individual situation and find the right building blocks for your protection.
Our experts help you understand your existing policies and identify any gaps in cover. We provide expert advice on topics such as the optimal level of your disability income benefit or whether it makes sense to supplement it with sickness daily allowance insurance. Make use of our expertise for peace of mind about your finances. We support you from analysis through to completion and are also by your side in the event of a claim. Your protection is our concern.
Request your personalised risk analysis now: Have your insurance situation reviewed free of charge and receive concrete suggestions for improvement.
More useful links
Wikipedia provides a comprehensive overview of occupational disability insurance.
Wikipedia explains sickness benefit in Germany in detail.
The Federal Ministry of Health provides official information on sickness benefit.
The Federal Statistical Office (Destatis) provides up-to-date statistics on sickness absence in Germany.
The Federal Ministry of Labour and Social Affairs (BMAS) defines the term occupational disability in its pensions glossary.
The German Pension Insurance provides comprehensive information on the reduced earning capacity pension.
The German Insurance Association (GDV) provides key facts about occupational disability insurance.
The Federal Institute for Occupational Safety and Health (BAuA) examines the costs of incapacity for work in Germany.
FAQ
How long will I receive sick pay from my statutory health insurance provider?
Statutory sickness benefit is paid for the same illness for a maximum of 78 weeks within a three-year period. The employer’s continued payment of wages during the first six weeks is offset against this.
What happens if my private occupational disability pension is approved retrospectively, but I have already received sickness benefit?
In this case, the sickness daily allowance insurer may reclaim the payments already made, as many policies exclude benefits in the event of occupational disability. Please check your KTG terms and conditions.
Is an incapacity-for-work clause in occupational disability insurance always a good idea?
An incapacity for work clause can be very useful, as it often pays out faster than the actual occupational disability pension. It bridges the period of sick leave until occupational disability is established. It is particularly worth considering for self-employed people without entitlement to sickness benefit.
What role does the Trier Social Court play in the context of occupational disability pension and sickness benefit?
In 2011, the Trier Social Court ruled (ref. S 5 KR 40/11) that private disability pension benefits must not be offset against statutory sick pay. This ruling is an important reference.
How high should my private disability pension ideally be?
Your disability pension should cover at least eighty per cent of your net income so that you can finance your standard of living as well as deductions for health insurance and taxes.
What can nextsure do for me?
nextsure offers comprehensive advice and tailored insurance solutions as a digital insurance portal. We help you optimise your policies and close cover gaps, including on the topics of private disability income insurance and sickness benefit.
