The price of the government’s proposal for early withdrawal will increase significantly if more people than expected use it. It appears from a parliamentary response from the Minister of Employment Peter Hummelgaard (S).
According to the government, the scheme, popularly called the Arne reform, will cost DKK 3.1 billion a year.
It is the price tag in 2025 if 60 percent of the 49,000 people expected to have the right in that year choose to exploit it.
– The utilization rate has been determined, among other things, on the basis of the experience from the early retirement scheme, where it has been corrected that those entitled to early retirement have a lower average income.
– The estimate is subject to uncertainty, writes Peter Hummelgaard in a reply to the Conservatives’ Naser Khader.
Unsurprisingly, however, the price rises – and thus the need for financing – if more than the 60 per cent choose to exercise a right to early withdrawal.
If 70 percent – or about 5,000 more than expected – choose it, the price is 3.6 billion kroner.
If 80 percent choose it, the price tag is 4.2 billion kroner, and if all 49,000 use the right, it will cost 5.2 billion kroner.
– It is noted that a utilization rate of 100 percent seems very unrealistic, the minister writes and writes further:
– For example, the 20 percent of those entitled to the highest earned income have an average monthly income of DKK 55,000 and a pension wealth of approximately DKK 3 million, which means that they can obtain an average benefit on early retirement, which is less than DKK 9,000 before treasure.
In particular, the financing of the government’s proposal for early withdrawal has been under discussion.
According to the government, it must be financed through a special tax on the financial sector, a rollback of tax breaks for shareholders and tax on profits from the sale of properties.
Source: The Nordic Page