Benefits of deferring early retirement

By deferring your early retirement, you get the opportunity to have a tax-free premium calculated.

Postponing early retirement is also known as the deferral rule and means that you wait to start early retirement for a certain period. 

If you were born before January 1, 1956, you can no longer take early retirement.

How long you have to postpone early retirement depends on your date of birth and the number of paid hours reported to the income register from the time you receive your early retirement certificate until you retire and/or reach state pension age. 

If you postpone your early retirement, it will affect the rate you can receive on early retirement and the calculation of the tax-free premium.

Read more below:

How do I get the tax-free premium paid out?

Calculation and payment of the tax-free premium is automatic. Therefore, you do not need to apply for the tax-free premium yourself.

The premium is calculated on the 11th of the month - after you become a state pensioner. For example, if your birthday is on October 21, the calculation will take place on November 11.

What can you get?

The unemployment insurance fund calculates your working hours based on what your employer has reported to the income register and completed annual statements (for self-employed persons). We calculate the period from after you meet the deferral rule until your state pension age.

For every 481 hours of work you have had, you earn a premium portion of DKK 14,658 as a full-time insured and DKK 9,773 as a part-time insured (in 2024 figures).

You can earn a maximum of 12 award portions, which corresponds to 5,772 hours of work.

If you have received unemployment benefits or early retirement, this will affect the calculation of the tax-free premium, as the benefit hours are included in the 5,772 hours.

Example:

The hours worked during the period are calculated at 5,330 hours, which would give 11 premiums (5,330 : 481 = 11.08 premiums rounded down to 11). However, you have received unemployment benefit for 650 hours.

This gives a total of 5,980 hours (5,330 + 650). We can count a maximum of 5,772 hours, so the working hours are adjusted down to 5,122 hours, which will give 10 premiums (5,122 : 481 = 10.65 premiums rounded down to 10).

As annual statements are rarely final when you reach retirement age, we only make a preliminary calculation of your tax-free premiums when you reach retirement age and recalculate the calculation when the last annual statement is final.

Have you worked abroad?

As a starting point, you earn premiums from work you have done in Denmark, the EEA, Greenland, the Faroe Islands or Switzerland. However, it is a condition that during the period you have been resident and stayed in the realm (Denmark, Greenland and the Faroe Islands), in another EEA country or in Switzerland.

If you left the UK before January 1, 2021, you can also use work in the UK.

In order to count work performed outside these areas, you must be posted by a Danish employer or work on international terms for organizations etc. that Denmark is a member of.