Denmark’s government has proposed a significant increase in the tax-free bonus to seniors in Denmark, to encourage older citizens to remain in the workforce beyond the official retirement age. The new scheme would boost annual payouts by over 9,000 DKK by 2029 for eligible workers.
New Incentives Aim to Keep Seniors in the Labor Force
In an effort to retain seniors in Denmark in the labor force, the Ministry of Employment has introduced a legislative proposal to increase the country’s tax-free senior bonus, also known as the “seniorpræmie.” The new proposal, put forward in Parliament on October 8, 2025, significantly boosts the financial incentives for Danes who choose to work full-time after reaching the state pension age. The goal is to keep more seniors in work.
Currently, seniors in Denmark working an average of more than 30 hours per week can receive tax-free payouts for continuing employment after retirement. The bonus is paid both in the first and second year post-retirement. The proposed bill aims to increase these amounts substantially over the next several years. Those who keep working will get more money.
Bonus Amounts Rising Through 2029
If enacted, seniors in Denmark who work full-time for one year after reaching the public pension age will receive a first-year bonus increase of approximately 5,300 DKK, raising the total to 53,901 DKK by 2026 based on 2025 price levels. By 2029, the first-year bonus would climb to 63,080 DKK, a total increase of over 9,000 DKK.
Similarly, the bonus for seniors in Denmark working into the second year would rise by 3,200 DKK in 2026, reaching 32,074 DKK. By 2029, that amount is projected to increase to 37,420 DKK, the second year bonus rising by about 5,400 DKK.
These figures reflect the government’s growing effort to adjust labor policies in the face of an aging population and workforce shortages in several sectors.
Rising Participation Among Older Workers
The initiative is a direct response to a surge in the number of people choosing to remain in the workforce past retirement age. Since January 1, 2023, the number of employed individuals beyond the public pension age has grown by 18,500. The government expects this figure to continue climbing in the years ahead as incentives improve.
The increase in tax-free bonuses is designed to make working longer not only practical but economically beneficial. It aligns with a broader political strategy to improve labor market flexibility, maximize economic potential, and address challenges posed by an aging population.
Broader Inclusion of Overseas Work
In addition to boosting the financial rewards, the new proposal includes a significant expansion of eligibility. For the first time, labor performed in Greenland and the Faroe Islands will count toward meeting the threshold required to qualify for the senior bonus. That aligns work in these regions with employment in EU/EEA countries and Switzerland, effectively broadening the geographical scope considered under the program.
This adjustment will make it possible for senior Danes who spend considerable time working in Greenland or the Faroe Islands to qualify for the benefits, supporting both regional labor demands and individual financial planning.
Support Across the Political Spectrum
The legislative proposal follows commitments made in the 2023 agreement on personal income tax reform and is backed by a coalition of parties including the governing Social Democrats, Venstre, the Moderates, Conservatives, the Danish Social Liberal Party, and the New Right. The broad political support highlights the importance of ensuring a sustainable and inclusive labor market policy as Denmark responds to demographic and economic pressures.
Eligibility and Application Process
Seniors in Denmark who qualify for the bonus, must meet certain criteria, including working an average of at least 30 hours per week during the eligibility period. The payouts are tax-free, further enhancing their attractiveness to potential recipients.
Those interested in the senior bonus can learn more and verify eligibility requirements by visiting Denmark’s citizen service platform, Borger.dk.
Looking Ahead
As the Danish government moves forward with its labor market reforms, the expanded senior bonus program is expected to play a critical role in maintaining economic momentum and easing pressure on the welfare system. By rewarding those willing and able to work beyond retirement age, the initiative aims to build a more sustainable future for Denmark’s workforce and public finances.
