1999 - Law on Amendment of the Law on Unemployment Insurance Act, the Senior Benefit, and the Law on an Active Labour Market policy (Flexible Retirement, etc.) (Law no. 276 of 12 May 1999)

Policy Field: 
Working Life
Topic: 
Early Retirement
Country: 
Major Implications of the Reform: 

If one postpones the transition to the voluntary early retirement pension scheme a minimum of two years after one obtains a certificate for the scheme and has worked a minimum of 3,120 hours (the so-called 62-year rule), one can avoid the new sanction mentioned beneath. If not, the sanctions are imposed on the individual. The new sanctions:

  • Withdrawal from the labour market before one fulfils the 62-year rule means that all pension funds that give entitlement to tax deduction will be offset against the pay-outs of the voluntary early retirement pension scheme regardless whether the pension funds have been disbursed or not.
  • Withdrawal from the labour market before one fulfils the 62-year rule results in reduced pay-outs from the voluntary early retirement pension scheme, which equals a maximum of 91 per cent of the highest unemployment benefits rate.

Moreover a postponement of entering the voluntary early retirement pension scheme after one has fulfilled the 62-year rule results in that one earns a lump sum exempted from taxation each quarter of a year. This lump sum was 8,600 DKK in 1999, and maximum of 12 lump sums could be granted.