Good news about tax and pension
As tradition dictates, there are changes coming to the pension area in 2024. If you are a state pensioner in Denmark, you can, for example, look forward to no longer having your earned income offset against your state pension. There are also changes underway for old-age savings schemes.
| The Danish Government has agreed on a new tax reform |
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And the date has been set for the implementation of the reform. As something new, the agreement includes good news for anyone who wants to work leading up to the state pension age, including increased deductions and senior bonuses (seniorpræmier). Find more information about the new tax reform here |
1: State pensioners can keep working without any offsetting in the state pension
From 1 January 2024, the income of state pensioners will no longer affect the basic amount of their state pension and pension supplements. This means that there will no longer be a limit to how much state pensioners can earn alongside their state pension without having their state pension reduced.
The change clarifies the terms that apply when you want to keep contributing to the labour market as a state pensioner. For example, that salary, fees and income from self-employment where you take an active part in the operation are no longer included in the calculation of neither your own nor your spouse's state pension.
It also means that everyone will receive the basic amount at a fixed monthly rate, which in 2024 is:
| Earned income of 2023 is offset retroactively |
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On 1 June 2023, the Danish Parliament passed legislation allowing state pensioners to work without any offsetting in their state pension. The legislation takes retroactive effect from 1 January 2023. State pensioners who had their state pension reduced in 2023 on account of earned income will get their money back with the subsequent adjustment for 2023. This adjustment takes place in 2024. From the end of May 2024, Udbetaling Danmark will automatically send out a statement of whether you have received the state pension you were entitled to in 2023. The earned income of pensioners who work will still be included in the income base for the calculation of the personal supplement percentage used to calculate the elderly cheque, health allowances, heating supplement and media cheque. Udbetaling Danmark therefore still needs state pensioners to submit information on their earned income. |
2: Better conditions for old-age savings schemes
In February 2024, the Ministry of Employment expects to present a proposal to not include the spouse's/cohabiting partner's (or others in the household) contribution to old-age savings schemes in the income base when calculating certain social benefits. A political agreement has been reached and must be adopted by law before the rules on better conditions for old-age savings schemes apply.
The change means that old-age savings schemes will be relevant to more people. However, old-age savings schemes will still not be relevant for all employees under a company agreement, and the individual employee will therefore still need advice in relation to their personal income and tax conditions. Old-age savings schemes are typically relevant if you pay bottom-bracket tax at most and have the prospect of the pension benefits being offset against the state pension supplement. This can be assessed with greater certainty for contributions at the end of the working life, and old-age savings schemes are especially aimed at contributions in this part of life. You can thus deposit: