Around 130,000 Danish citizens are set to benefit from new income set-off rules, which make it more attractive to work whilst receiving a pension.

The Danish government plans to bring forward the bill abolishing set-off rules for earnings. The measures will initially enter into force with effect from 1 January 2023. The plan was agreed by the Danish People's Party, Socialist People's Party, Danish Social Liberal Party and the Christian Democrats.

The package includes abolishing set-off rules for income earned from work against income from a pension. This applies both to offsetting one’s own income from work against the basic amount of the state pension and to pension supplements, and offsetting due to one's partner or spouse's income from work against the state pension, early retirement and senior pension.

It is estimated that around 130 000 citizens will avoid financial penalties because their spouse or they themselves choose to work whilst in receipt of a pension. This includes both state pensioners who will be excluded from their state pension because they work themselves, as well as state pensioners, senior pensioners and early retirees who will be offset against their state pension because their spouse or partner works.

Commenting, Employment Minister, Peter Hummelgaard, said: “Set off must go as soon as possible. And it is common sense that you are not financially penalised for your spouse or yourself taking on an extra stint. We lack hands in the labour market, and this gives many seniors throughout Denmark more freedom to continue to contribute to the labour market.

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