Factsheet for measure
DK-2020-10/1795
– measures in Denmark
Offset of additional corona-related income against pension removed
Indtægter fra ekstra corona-arbejde skal ikke længere modregnes i pension
Background information
On 24 February 2021 the Danish Government concluded an agreement, which ensures that additional corona-related work taken on by retirees and/or their spouse/live-in partner is not set off against their current pension. Usually the pension is reduced if any additional income from the pensioner or their spouse/live-in partner surpasses a certain thresholds.
Content of measure
The agreement covers all types of additional time and overtime attributable to COVID-19. The scheme is not limited to industries, occupations or functions, and includes both public and private employees. In the case of additional and overtime work, it covers all work that goes beyond what is agreed under the employment contract and also applies to bonuses and special allowances that can be directly linked to the additional effort. Similarly, part-time workers who have additional work under COVID-19 will be covered.
In order to avoid the set-off, retirees have to report the additional work to the Danish Public Benefit Administration (Udbetaling Denmark) with the following documentation:
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A pay slip documenting the additional work
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A signed solemn declaration
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An employer’s declaration stating a direct link between the work and the pandemic and that the performed work Is beyond employers contract.
It is expected, with considerable uncertainty, that the agreement will cost the State around DKK 60 million (€8 million) annually in the next two years, including implementation and operating costs. The agreement is financed by the funds allocated to the management of COVID-19.
The agreement is in effect from March 2020 to the end of 2021.
Use of measure
Retirees has been able to report their additional corona-related work since the 27th of April, 2021.
Target groups
Actors and funding
|
Actors
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Funding
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National government
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National funds
|
Social partners
Social partners' role in
designing the measure
and form of involvement:
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Trade unions
|
Employers' organisations
|
|
Role
|
No involvement
|
No involvement
|
|
Form
|
Not applicable
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Not applicable
|
Social partners' role in the
implementation, monitoring and assessment phase:
-
No involvement
-
Main level of involvement: N/A
Involvement
No involvement.
Views and reactions
The Confederation of Danish Employers (Dansk Arbejdsgiverforening) has previously argued for an off set of all income in the state pension, as it will attract more seniors to the labour market, which will be helpful after the pandemic. The said measure is only a fraction of the demand, as it applies only to additional work that is directly linked to corona. However, the measure is a step in the discussed direction.
Sources
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05 May 2020: DA: Eliminate the offsetting of earned income in the state pension
(www.da.dk)
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24 February 2021: Aftale om ingen modregning i pension for ekstraindtægter i relation til COVID-19
(bm.dk)
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24 February 2021: New agreement: Income from extra corona work should no longer be offset against pension
(bm.dk)
