Your benefit may be affected if you have income from personal employment or receive holiday allowance.
Your income from personal employment is included in the calculation of your benefit. You may earn up to DKK 25,400 (2023) per year before tax without it impacting your benefit. If you earn more, your benefit will be reduced by 64 per cent of the income that exceeds DKK 25,400 (2023). If you only receive the benefit for a part of the year, the limit is DKK 2,116.66 for each month in which you receive the benefit.
Salary income
Each month, your employer reports salary income to the Danish Tax Agency’s income registry. Your benefit is therefore recalculated if there is new information about your salary income in the income registry.
If, after a month’s early retirement pension has been calculated, there is reported income in the income registry, your benefit will be recalculated. If you have received too much, then your benefit will be reduced by the excess amount in the next payment of your early retirement pension. The recalculation takes place each month, and you will receive a new letter about your payout each time the size of your benefit changes.
Examples:Your March income exceeds the limit of DKK 25,400 and your benefit is therefore reduced by 64 percent of the income that exceeds the limit. In April you do not have any income. You will be paid the full benefit with not deductions.
In May, you have an income of DKK 5,000. Your benefit will be reduced by 64 per cent of the salary income for the month of May.
In July, you have an income of DKK 25,400. The reduction for the month of July results in you not being paid your early retirement pension in that month. In August you have no salary income and therefore your early retirement pension is not reduced due to salary income.
Self-employment
Your benefit will be reduced if you have an income from personal self-employment amounting to more than DKK 25,400 (2023) in a calendar year. Your benefit is reduced due to income from self-employment if you are active in the operations of the company. This also applies if you are a co-working spouse and receive income taxed as a co-working spouse.
The reduction of income from self-employment is based on the preliminary income assessment which states your expected annual income from self-employment. Your expected annual income from self-employment is spread out as 1/12th of the income for each calendar month.
Once per year, Udbetaling Danmark - Public Benefits Administration will recalculate your benefit on the basis of your tax assessment notice from the Danish Tax Agency for the year that has passed. This is called the ‘annual recalculation’. You must therefore change your preliminary income assessment if you have significant changes in income from self-employment in order to avoid a major change in your benefit during the annual recalculation.
If you have been paid too little in early retirement pension, you will get the amount owed paid and if you have been paid too much, you must repay the amount.
Payment in lieu of untaken days of holiday
You must notify Udbetaling Danmark if you receive a payment in lieu of untaken days of holiday. If you receive a payment in lieu of untaken days of holiday, the reduction will take place at the time at which you take the holiday.
You must notify Udbetaling Danmark yourself about when you take holiday and how much you receive in payments in lieu of untaken days of holiday. You can decide for yourself if you want to change state the payment in lieu of untaken days of holiday as a gross or net amount. If you state the payment in lieu of untaken days of holiday as a net amount, we will recalculate it to be a gross amount by multiplying it by 1.70.
Income, etc. from other countries.
If you have salary income or income from self-employment in other countries where you are an active part of the business operations, then each month you must send information about the income to Udbetaling Danmark. If you do not send the information before the 15th of the following month, the payment of your early retirement pension will cease from the 1st of that month.
If you are a resident of another country
If you are a resident of another country or move abroad, then each month you must notify Udbetaling Danmark about your current address. If you have not sent in information about your current address before the 15th of the following month, the payment of your early retirement pension will cease from the 1st of that month. The payment can at the earliest be resumed from the 1st of the month after Udbetaling Danmark – Public Benefits Administration has received the information.
Read more about what information and changes you must notify Udbetaling Danmark – Public Benefits Administration of under ‘Duty of disclosure - remember to notify of information and changes.’
