Haggling over your pension or your rights as a retiree are not problems that many face, it must be said. Fewer still anticipate any such problem as they work their way through the ordinary trials and tribulations of life in Denmark. Most have enough on their plates without having to worry about retirement or about surviving in the future on their well-deserved pensions – a comfortable, inevitable fate most take for granted.
That pension is yours after all, and your tax payments guarantee your God-given right to enjoy your last years in relative comfort, after having given your best years to your family and the common good.
Well, not quite.
Leif Christensen is sixty-seven-years old and lives in Bang Saphan in the south of Thailand with his Thai wife Lat. It is his second marriage. His first wife died after 40 years of marriage some years before Leif retired from 50 years of steady employment in Denmark.
But now that he has retired, he is not smiling as he should. In fact he is more than a little bemused that his fate has been sealed by rules written by anonymous autocrats who apparently have no idea how people really live their lives, nor why or where.
Quite unexpectedly, upon retiring after all those years of paying taxes, and through no fault of his own, Leif is now paid just half of his guaranteed old-age-pension. To cover food, health and living expenses, he has no choice but to live on just DKR 5,000 a month.
As required by law, Danes must pay tax on their pensions no matter how modest. Also, according to the rules, any retired Danish citizen who settles outside the EU, Norway, Switzerland or Lichtenstein, automatically loses half of their pension, the balance of which however is still taxed.
You also lose the right to any untaxed pension supplement from your trade union if you move ‘offshore’. That means if you move abroad, you automatically lose a lot more than half of what everybody else who opts to retire in Denmark gets!
And don’t forget in any such case, you also voluntarily forfeit your right to the full list of social welfare entitlements which as a taxpayer all are privy to until he or she dies. Offshore or overseas you are no longer any drain on government funding at all.
That surely was taken into account when the rules were written about retired citizens living outside the country in retirement. Right?
In Leif’s case, after all is said and done, he is left with less than DKR 5,000 to survive on every month.
He is not angry, but he is not happy either. Why should he lose more than half of his entitlement until he dies just because he wants to live in the country of his choice – a country which welcomes him and where his wife was born?
Born in Næstved in Denmark in 1938 Leif spent eight years at public school then took a position as an apprentice mechanic with the Renault dealership in his hometown. Then after serving his time in the army, Leif married, bought a house and had two children.
“I was with that company for 25 years,” Leif remembers, and ended his time there as a foreman.
But it was time for a change, and Leif got a new job as a driver with a delivery and trucking company in Næstved.
“We were only four people working in the company at that time,” Leif remembers, ”but within the next few years the company grew and ended up with 120 employees with me promoted to transportation coordinator.
And then sadly, after 40 years of marriage, Leif’s wife died.
“It was hard times,” Leif recalls. “But then two years later, the boss called me into his office. He announced that I was approaching my 10-year jubilee!”
Leif was given the choice: A big party or a holiday abroad paid for by the company.
“I was still saddened by my wife’s death, so I didn’t want a party,” Leif remembers. “On the other hand, I had never travelled that much, so I suggested I go to Mallorca for a week.”But Leif’s boss said “No”. “Go home – sleep on it. You deserve a much longer and better holiday,” he exclaimed to Leif’s surprise.
Next day Leif told him that he was ready for a holiday – in Phuket, Thailand.
THE THAI ADVENTURE
So it was that the 63-year-old Dane landed in Phuket on holiday to relax in perfect luxury and, it transpired, to meet Lat – then a 50-year-old Thai woman who later was to become his wife.
“It was step by step at first,” Leif smiles. “Lat had no children, but of course had her immediate family which means a lot in Thailand. I visited her in Phuket again, and then I invited her to join me in Denmark.”
And so the saga began, in the midst of love and the hope of spending his new future after a lifetime as a Danish taxpayer with someone he loves, and without the need to worry about money.
For her first visit to Denmark Lat was granted a half-year visa to stay in Denmark, but only after Leif had provided a bank guarantee of DKR 51,000. But of course Lat had to leave Denmark after her half-year stay.
In the meantime, after selling his house in Denmark, Leif and Lat bought a house in Bang Saphan. They got married in Denmark and Leif decided to retire at 64, and thus claim the special Danish “efterløn” – an early retirement allowance. As is the law, he registered his claim for the allowance with his local trade union SID, where he had been a member all his life.
“They said at the time that that was fine, but within two months of moving to Thailand I got a letter from the union.”
In the letter Leif was given the ultimatum to show up in Denmark within two months or lose his retirement allowance.
“You can not stay outside the EU, Norway, Lichtenstein and Switzerland for more than three months,” the letter explained.
So Leif left Lat behind and returned to Denmark and picked up his old job where he worked for another three years until the day of his official retirement. Then he and Lat had to make the difficult decision.
Where were they to live?
“Lat is younger than I. My children are adults and doing fine of course by themselves. Family traditions in Thailand are very strong and now we had a house in Thailand,” Leif explains. “So the answer was simple really. We wanted to live in Thailand!”
So off they went to Bang Saphan. But before they left, Leif talked with his union and the Danish tax authorities. From them he learned that by choosing to live in Thailand, he would only get half of his old-age pension, but it would be tax free.
What he did not know was that his monthly paid ATP from the union, worth DKR 1,900, would be taxed to the tune of 40%!
Somewhat bewildered after receiving the first reduced payment, he called the Danish tax office in his hometown for an explanation.
“Yes, you are right! There is a mistake,” they confirmed. “You have to pay the 40% tax on your ATP money. But we notice also that you got your (half paid) old-age pension tax-free, with your wife described as the reason for the relief.” This was a mistake too, they said, and at the end of that day, Leif ended up paying the 40 pct on his ATP pension and then having to pay tax on his already massively reduced old-age pension.
And why the extra tax on his pension? Because his wife is Thai and they are now living together in Thailand rather in Denmark – where all the hospitals, doctors, dentists, social welfare services are free!
According to official Danish statistics, the average Dane claims welfare and health services worth DKR 44,793 every year! Work it out. Health insurance care, medical support, nursing homes, dental support, optical support, home-nurse support, housing allowances, travel support and so on.
So by moving to Thailand, Leif forfeited all of that free care for his wife and family, and lost a lot more than half of his pension in return, as none of the critical social and welfare services are free in Thailand, even if you are a pensioner.
Leif needs his teeth fixed and Lat, after working a physical masseur for 30 years suffers a bad back.
They can go back home to Denmark where everything will be taken care of and paid for after a five-week stay to qualify. But they say no!
They are happy in Thailand even though they worry that the low income from Denmark is not enough to pay for adequate health insurance.
“I would like to save enough money to go and see my children in Denmark. Or help them buy tickets to come to Thailand,” Leif says. “I feel it is not fair to lose my independence or what I thought I had earned through my hard work all my life.”
But after 50 years hard work in Denmark, he is on his own although Leif is one of 17,000 retired Danes living outside the EU, Lichtenstein, Norway and Switzerland.
The day after our interview, Leif received a letter from Denmark telling him that all retired people in Denmark, EU, Lichtenstein, Norway and Switzerland can now apply for another DKR 6,300 a month!
But of course, the way things stand now, he and 16,999 others will get nothing.