Danish pensioners loose half their pension if they settle outside EU, Lichtenstein, Switzerland, or Norway. The basic amount of 4.262 Danish kroner per month will still be paid out, but the pension supplement of an additional 4.290 Danish kroner is only for Danish citizens living in the countries mentioned.
It is the National Social Security Agency’s International Pension Office in Copenhagen which calculates and pays Danish old-age pensions and anticipatory pensions to pensioners living outside Denmark.
This office currently pays pensions to around 17.000 Danish pensioners living in more than 100 countries all over the world.
The right to live abroad and still receive the basic pension is old Danish law. The right to get the supplement follows EU rules. That is why Danish citizens living in Asia can not get the full pension.
The rules often come as a surprise to Danes who plan to retire in this region. They see that Danes who are retiring in the South of Spain are paid the full pension and fail to see that it is fair that they cannot retire in Thailand and also be paid the full amount.
Hans Sønder, a retired from Denmark, recently posted an open letter on the website www.Udvandrerne.dk. He suggests that Danes affected by this rule should join hands and try to lobby for a change to the rule.
“I have moved from Denmark and settled in Thailand. Now I find out, that when I reach the age of 67 my pension will be less than half of what a Dane settling in an EU-country will get. All together I will pr. month after tax get 2.798 d.kr,” Hans Sønder writes.
To Hans Sønder and many others it feels unfair because they at the same time will have to pay for a number of things that pensioners living in EU get for free, such as health insurance and financial support to cover costs like medicine, eye glasses, local travelling and other expenses.
The illegal loop hole
Elsewhere on the website – as well as on other web boards serving Danes living outside EU – fellow pensioners freely explain to newcomers how to avoid the cut.
One loop hole is to move the registered address from Denmark to a cheap rented room in Spain, which is the only country where Danish pensioners don’t pay Danish taxes. From here, the pensioner may then apply for a one year visa to stay in Thailand but without moving his or her official residence out of Spain.
Another way of circumventing the rule is to keep an address in Denmark. To avoid being registered as having left Denmark for Thailand, they first travel to Norway where they can stay indefinitely without suffering any cut in their pension. From here they then travel via Finland to Thailand where they stay most of the year except for visits to Denmark on special occasions.
Speaking to the Danish newspaper Urban, who made a case out of the illegal practises of some Danish residents outside the EU, the Danish Ministry of Social Welfare said they encouraged local municipal authorities to start investigating the various reports of Danish residents in Thailand and elsewhere who fraudulently avoided the cut in their pensions. So far, practical obstacles have, however, prevented the local municipalities in checking if any pensioner living in their area should be living this way. There are more than one million pensioners in Denmark.
For others it is more the principle aspects than the loopholes of the system which are in focus. They question in particular the logic behind why pensioners living outside EU should not be granted the supplementary pension, in particular when considering that they actually save the Danish tax payer a lot of money by moving out.
“Why is it more reasonable to grant the full amount to pensioners living in Spain than to pensioners living in Thailand?,” they ask.
This is when the question becomes political.
“What is needed is for all in the same situation to start putting pressure on the politicians,” writes Hans Sønder.
“But who will take the initiative [to organize this] – I don’t have the opportunity or the energy.”
Research: Mogens Rasmussen