The Danish government announced yesterday that nearly 30,000 people have now applied for the new right to early-retirement it introduced, saying the sheer volume of applications since the start date of 1 August this year proves the measure was necessary.
The ruling Social Democrats agreed with other political parties in October 2020 to bring in the so-called “Arne” pension – a reference to a name associated with older male workers in Denmark. The scheme is an entitlement for citizens deemed to have had long and hard-working careers to retire up to three years early.
Yesterday’s announcement of the numbers applying follows criticism from the pensions and insurance sector about the financing of Arne pension, with lobby group Insurance and Pensions Denmark (IPD) saying recently that the new financial tax being introduced would be unnecessarily heavy.
Mattias Tesfaye, acting minister for employment and gender equality and member of Denmark’s Social Democrat party, said in a statement this morning: “The figures tell me that there has been a need for a solution, with an objective right for those citizens who have slaved away in the labour market for a great many years.”
The Ministry of Employment said of the 29,893 applications it received in the last four months, around 10,500 people had been granted the maximum early-retirement entitlement, while more than 11,500 had been allowed to retire one or two years early, and more than 14,500 had been asked to provide additional documentation.
“I can confirm that both the Liberals and Conservatives [opposition parties] now want to drop early retirement and would rather spend the money on tax breaks. In my view, that prioritisation is wrong,” Tesfaye said.
He said politicians were asking citizens to work for more and more years in order to maintain a good welfare society. “So I also think we have a responsibility to those who, after many years in the labour market, would really like to leave a few years earlier and have a good retirement,” he said.
The early-retirement scheme allows people who have spent 42, 43 or 44 years in the labour market – including periods of unemployment, parental leave and training – the right to retire up to three years before the national pension age.
IPD said last week that the latest proposal for the new financial tax could extract as much as 1.5 times the revenue needed from companies, and suggested the cost of the Arne pension could be financed to a much greater extent with income from the fight against VAT and tax fraud.