The Danish government has extended a scheme that removes pension off-sets for those in receipt of a pension that are earning extra income in relation to Covid-19.

The decision to extend the scheme, which was originally created in February 2021, was announced as part of an agreement reached by the country’s main parties in the Finance Act 2022.

The scheme will now run to the end of 2022 and the government has set aside DKK 2m for additional expenses and administration of the scheme. The decision has been praised by Insurance and Pension Denmark (I&P Denmark), which said that offsetting pensions is an inappropriate financial punishment for those that save up for old age who are ready to put in extra effort when society needs it.

“It is so important for our society, both now and in the future, that Danes are not punished for saving up – or for taking an extra turn when needed. So, it is absolutely right that the parties intervene here,” I&P Denmark CEO, Kent Damsgaard, said.

He is calling on the government and the Folketing to build on the agreement and take a permanent step towards inappropriate set-off. “We have one of the world's absolute best pension systems, but there is still great potential in weeding out the interaction problems in the system that affect far too many Danes.”

I&P Denmark also welcome the parties’ sub-agreement on new green initiatives.
“It is really positive that politicians are setting aside money for further development of renewable energy. The next important step should be a plan for concrete action on Power-to-X and a climate adaptation plan, where there is a large joint task for the public sector and the members of the insurance and pension industry,” Damsgaard said.

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