Advantages of deferring early retirement and the tax-free bonus

Retirement age: 63.5 years

To receive the highest early retirement pension rate, you must:

• wait six months before taking early retirement.
• have worked at least 780 hours as a full-time insured person or 624 hours as a part-time insured person during the period

Tax-free premium

Once you have deferred your early retirement pension for six months and met the hourly requirement, you can earn a tax-free bonus. You earn one bonus for every 481 hours you work.

Retirement age: 64 years

You do not need to defer your early retirement pension to receive the highest early retirement pension rate.

Tax-free premium

You can earn one bonus for every 481 hours you work after receiving your early retirement certificate.

You can only earn bonuses after transitioning to early retirement if:

• you first started receiving early retirement benefits two years after receiving your early retirement certificate, and
• you have worked at least 3,120 hours as a full-time insured person or 2,496 hours as a part-time insured person during the period.

You do not need to apply to have your tax-free bonus paid out. Calculation and payment are automatic once you start receiving your state pension.

The calculation is made on the 11th of the month after you become eligible for state pension.

My unemployment insurance fund calculates your hours when you start receiving state pension. The hours are calculated based on what your employer has reported to the income register and your final annual statement if you have been self-employed. We calculate the period from the date you received your early retirement certificate until your state pension age.

Since annual statements are rarely final right away, we first prepare a preliminary statement. We recalculate when the final annual statement is ready.

If you have received unemployment benefits or early retirement benefits, this will affect the calculation, as benefit hours are also included in the final calculation of the number of hours.

Example:

You have worked 5,330 hours.
This gives you 11 bonuses (5,330 ÷ 481 = 11.08, rounded down).

You have also received daily benefits for 650 hours.
This gives a total of 5,980 hours.

We can include a maximum of 5,772 hours.
Therefore, the working hours are adjusted to 5,122 hours, which gives 10 premiums.

As a general rule, you can earn pension rights from work in Denmark, the EEA, Greenland, the Faroe Islands, or Switzerland. If you worked in the United Kingdom before January 1, 2021, those hours can also count.

Work outside these areas can only be counted in special cases, e.g. if you have been sent abroad by a Danish employer.

Please contact us if you have worked abroad so that we can advise you based on your situation.

Contact My Unemployment Insurance Fund.