Denmark has abolished the offsetting of earned income in the basic amount of the national pension and pension supplements.

The new law, which has come into effect from 1 January 2024, but applies retroactively from 1 January 2023, could see a typical skilled pensioner couple increase their disposable income by DKK 24,000 per year, if they continue working alongside receiving their state pension.

Insurance and Pension Denmark pension director, Jan. V. Hansen, said the set-off rules have been a “serious and annoying barrier” to encouraging experienced Danes to remain in the workforce after the state pension age.

"As a society, we are hugely dependent on citizens taking responsibility for their own old age by saving, and on more experienced Danes continuing after the state pension age, if their health and ability to work allow it. Therefore, it is wise in every way that working seniors in the future will not be penalized in their wallets,” V. Hansen said.

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