State Pension

• Danish citizens¹ with permanent residence in Denmark who have reached the statutory retirement age.

• The scheme is tax-financed from the general budget.

• Payment Denmark (Udbetaling Danmark) handles all tasks related to the state pension.

Qualifying conditions

• For Danish citizens the minimum requirement is 3 years of residence in Denmark between the age of 15 and the retirement age. For EU citizens this vesting period is reduced to 1 year of residence in Denmark as the minimum residence requirement of 3 years can be met by merging it with periods of residence in other EEA countries. For third country nationals the residual requirement is increased to 10 years of residence in Denmark, of which at least 5 years of residence must have been spent in Denmark just before reaching the retirement age.²
• The statutory retirement age ranges between 65 (for persons born before 01/01/1954) and 69 (for persons born after 31/12/1966); it is based on an indexation mechanism and increases in relation to life expectancy at the time when the person reaches the age of 60.

Basic amount

• For individuals reaching the retirement age before 30/06/2025: the right to a full basic pension is accrued after 40 years of residence in Denmark, during the period from age 15 to retirement age.
• For individuals who reach the statutory retirement age after 30/06/2025: the period of required residence in Denmark for a full basic pension is at least 9/10 of the time from age 15 to public retirement age.³
• If the individual is not entitled to a full basic old age state pension, (s)he might be entitled to a prorated pension.⁴

Pension supplement

• The pension supplement is tested against sources of personal income and spouse’s/cohabiting partner’s income, including earnings-related income (salary), interest, occupational pension, instalment pension, annuity, ATP Livslang Pension, etc. Assets (formue) are not considered as such, but the interest returns on the assets are counted in.

Early retirement

• No options for early retirement available.

Deferred retirement

• Individuals can defer retirement up to 10 years. During this time, the pensioner earns a supplement called the waiting percentage (Venteprocent).

Combining employment & retirement

• Termination of employment is not a precondition for claiming pension benefits; it is possible to work at the same time as receiving a state pension.
• Pension benefits will be reduced or waived if income from work exceeds certain earnings limits.

Pension benefits

• The state pension consists of a ‘basic amount’ and a ‘pension supplement’.
• Maximum amount: the full total amount of the state pension (combination of the full basic amount and the full pension supplement) is DKK 13,853 per month before tax for single pensioners and DKK 10,225 per month before tax for married/cohabiting pensioners.

Basic pension

• The full amount is DKK 6,518 per month before tax as a flat-rate benefit for all pensioners.
• The basic amount will be reduced if the pensioner earns more than DKK 344,600 (2021) per year through personal work and payment is discontinued completely if the pensioner earns more than DKK 599,200 (2021).
• Wealth or other income has no bearing on the calculation of the basic amount.

Pension supplement

• Means-tested, flat-rate pension benefit for those with
• insufficient levels of (pension) income.
• The full amount is DKK 7,335 per month for single pensioners and DKK 3,707 per month per person for married or cohabiting pensioners.
• The pension supplement is reduced by 30.9% if earnings-related income exceeds an annual amount of DKK 89,700 for single pensioners and DKK 179,700 for married or cohabiting pensioners.
• The supplement lapses completely if the annual income exceeds DKK 374,600 for single pensioners, DKK 457,700 for married or cohabiting pensioners (if both are pensioners), and DKK 318,700 for married or cohabiting couples with one being a non-pensioner.
• The first DKK 122,004 earned from personal work is disregarded in calculating the pension supplement.

Taxation and social security contributions

• Pensioners do not pay social security contributions.
• The total state pension (basic amount and pension supplement) is taxed as personal income.
• A recipient of the state pension can earn up to DKK 11,700 tax-free per year on work in private homes.