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:

• A pay slip documenting the additional work
• A signed solemn declaration
• 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

The measure is not implemented yet, and retirees will first be able to report their additional corona-related work from 1 March 2021.

Target groups

Workers	Businesses	Citizens
Other groups of workers	Does not apply to businesses	Older citizens

Actors and funding

Actors	Funding
National government	National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	No involvement	No involvement
Form	Not applicable	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

• 05 May 2020: DA: Eliminate the offsetting of earned income in the state pension (www.da.dk)
• 24 February 2021: Aftale om ingen modregning i pension for ekstraindtægter i relation til COVID-19 (bm.dk)
• 24 February 2021: New agreement: Income from extra corona work should no longer be offset against pension (bm.dk)