Denmark Agreement and foreign pension information 106-04013000

In Denmark, social security consists of a combination of compulsory contribution scheme, voluntary insurance and a universal means-tested scheme based on residence.

The contributory scheme insures employees against work-related illness, forced unemployment and death and provides income in retirement. The universal scheme covers most life events, including old-age and disability.

The legislation is the responsibility of the Danish government and contributions are managed through taxation. The administration and payment of pensions is the responsibility of the insurance fund and the relevant central and municipal government agencies respectively.

The Agreement with Denmark started on 1 January 2001. There are no previous versions.

For Australia:

Department of Social Services (DSS)

For Denmark:

Om Social, Børne og Integrations Ministeriet - Ministry of Social Affairs, Children and Integration

For Australia:

Services Australia

Note: the Australian Taxation Office (ATO) is responsible for double coverage provisions.

For Denmark:

• Udbetaling Danmark - Social Pensions
• Arbejdsmarkedets Tillægspension (ATP) - Labour Market Supplementary Pension Fund

For Australia:

Centrelink International Services (CIS)

Note: the Australian Taxation Office (ATO) is responsible for double coverage provisions.

For Denmark:

• Udbetaling Danmark - Social Pensions
• Arbejdsmarkedets Tillægspension (ATP) - Labour Market Supplementary Pension Fund

Under the Agreement with Denmark, information held about customers may be exchanged between the liaison agencies to determine entitlement to payments under the Agreement and under either country's domestic legislation (Article 13.1).

For information on bulk data exchange, see International Data Exchange Program and auto-indexation of foreign pensions.

The following liaison form is completed by Centrelink International Services (CIS) and sent to Denmark:

• AUS187DK - Australia/Denmark Agreement on Social Security

For help with creating and completing liaison forms, see Agreement liaisons, NZ CICs and exchange of information.

Denmark sends a covering letter and, if needed, provide an attachment detailing Danish insurance periods (OPG).

Under the Administrative Arrangements, each country will arrange for an agreed report to be and sent with claims for invalidity/disability pensions.

Medical examinations may also be undertaken upon request for foreign pension claim purpose. Generally, the liaison agency will contact Services Australia with the request. There is no provision for reimbursement of costs to either country.

The customer should contact Services Australia if they receive a direct request from the liaison agency to undertake a medical examination. Advise the customer to go through Services Australia’s foreign pension medical assessment process. Where the customer has already undertaken a medical examination based on a direct request from the Agreement partner without consulting Services Australia, the customer should contact the liaison agency to discuss any possible reimbursement options.

If a customer is claiming reimbursement of costs based on undertaking a medical examination requested by Services Australia for foreign pension purpose, consider all evidence provided. For example, if incorrect advice was provided to the customer by Services Australia that caused them to seek an independent medical examination which caused the customer to be out of pocket.

See Customer compensation and Act of Grace.

Samples of forms, foreign documents and translations are available through the Residence and International program homepage.

The Agreement with Denmark does not include double coverage provisions.

Any enquiries about double coverage or certificates of coverage should be directed to the Australian Taxation Office (ATO) website.

Any queries about taxation of pensions or the requirement to lodge a tax return should be directed to:

• In the other country - the tax authority in the other country
• In Australia - the Australian Taxation Office (ATO) website

See general information on taxation, including issuing Australian payment summaries.

Tax treaty

Australia has a double tax agreement with Denmark, which avoids the need for the customer to pay tax in both countries.

A person who is 'resident' in one country (according to the definition in the tax agreement) generally only pays tax on pensions in that country.

Tax deductions from income by one country may be allowed as a credit against tax payable in the other country.

Tax deduction

Danish pensions may be taxed (Skat) at the source.

The gross rate of Danish pension, before any deductions, is maintained.

Certificate of residence and tax liability (SKAT) form:

To reduce tax deductions from Danish pensions, non-Danish nationals and dual Australian/Danish citizens need to complete the Certificate of residence and tax liability (SKAT) form when claiming a Danish pension.

The SKAT form is completed together with the Certificate of residence and tax liability - explanatory notes and authorisation (Centrelink) form. The authorisation form:

• allows the ATO to forward the certified SKAT form to Services Australia
• is sent by the customer to the ATO

The certified SKAT form is sent to the Danish authorities.

Both forms are included in Danish claim packs and is available through the Residence and International program homepage.

Danish tax year

Denmark uses the calendar year (1 January - 31 December) as the tax year.

Australia does not have a Reciprocal Health Care Agreement (RHCA) with Denmark.

See general information on health insurance and Medicare coverage.

Any queries about:

• Health insurance coverage in the other country – tell the customer to contact the health insurance authority in the other country
• Medicare coverage - direct them to Medicare

Pensioners in Denmark usually have a health insurance deduction (Sundhedsbidrag) taken out of their Danish pension.

The gross rate of Danish pension, before any deduction, including for health insurance, is maintained.

The official language of Denmark is Danish.

See Danish naming conventions and pronunciation.

Telephone country code is +45.

Street address

Title FirstName Surname [Addressee]

Kastanievej 15, 2, tv. Agerskov [Street name, house number, floor, apartment number/placement, district]

8660 SKANDERBORG [Postcode, locality]

DENMARK

Note:

• In Danish the:
• ground floor is called "stuen / st." or in some cases 0
• floor above is "første sal" / "1. sal" (1st floor) and so forth
• The address contains an apartment number or the placement of the apartment (th., tv., mf.):
• th. means "til højre" / to the right
• tv. means "til venstre" / to the left, and
• mf. means "midt for" / in the middle

Post Office Box address

Title FirstName Surname [Addressee]

Postboks 321 [P.O Box + no.]

8660 SKANDERBORG [Postcode and locality]

DENMARK

Same-sex marriage in Denmark has been legal since 15 June 2012. Prior to those same-sex couples were recognised in the form of registered partnerships, by a law passed in 1989. Denmark was the first country in the world to pass such a law.

For Australia, the Agreement with Denmark (Article 2.1) covers:

• Age Pension
• Disability Support Pension (DSP)
• Parenting Payment Single (PPS)

Note:

• Only severely disabled DSP customers may be granted under the Agreement (Article 2.1(a))
• PPS can only be granted under the Agreement to Australian residents who are in Australia (Article 6.2), but autonomous PPS may transfer to the Agreement to extend portability in Denmark. See Lodgement rules and start day and Portability
• Only a 'Widowed person' may be granted PPS under the Agreement. ‘Widowed person’ means a person of either sex who stops being a member of a couple because of the death of their partner and who is not currently a member of a couple (Article 1(h))

Claims for Australian payments under International Agreements use the same methods and processes as domestic claims.

Forms to claim an Australian payment in Denmark can be obtained by:

• downloading the relevant form from the Services Australia website. See Resources
• contacting Centrelink International Services (CIS)
• contacting the Danish authorities

Australian forms needed

The customer is to complete and provide the following:

All claims:

• AUS140DK – Australian Pension Claim – Social Security Agreement between Australia and Denmark
• Mod(iA)DK – Income and Assets - Denmark

DSP only:

• AUS142DK - Work Capacity - Customer Information – Danish
• AUS109 - Treating Doctor's Report - outside Australia
• AUS175 - Medical Assessment Report - Disability Support Pension (Outside Australia)

Note: Denmark arranges for the AUS175 to be completed on a case-by-case basis.

Forms can be lodged at any Danish municipal office or Danish social security office.

Under Section 5 and 6 of the Administrative Arrangements, the Danish liaison agency will:

• accept all forms/documents and date stamp the AUS140 form
• verify the customer's identity and personal details, and
• send the form(s) and any supporting documentation to Services Australia with a liaison form specifying periods of residence in Denmark and information regarding Danish pensions

See the Exchange of Information and liaisons forms.

If a person is not an Australian resident and in Australia on the date the claim is made, they may use the Agreement to meet the residence rules for claims if, on that date, they are:

• an Australian resident or residing in Denmark (Article 6.1(a)), and
• physically present in Australia or Denmark (Article 6.1(b))

Note: PPS can only be granted under the Agreement in Australia (Article 6.2).

Claims under the Danish Agreement

Claims for Australian payment under the Danish Agreement may not be lodged in other Australian Agreement country.

See the Claim lodgement matrix.

Accepting other Agreement claims

Denmark will not accept claims for Australian benefits under other Australian social security agreements.

Claim lodgement consideration

PPS can only be granted under the Danish Agreement in Australia (Article 6.2).

The normal rules for working out the date a claim is 'made' and the start day apply to claims under the Agreement with Denmark. However, the Agreement also allows:

• the date of lodgement of a claim for an Australian payment in Denmark to be used as the date of lodgement in Australia (Article 11.2), and
• the date of lodgement of a Danish pension as the date of lodgement of an Australian payment (FP claim = AU claim) (Article 12.5)

See:

• Claims for Australian payments under International Agreements and
• Start Day (CLK) for coding assistance

The Agreement allows:

• totalisation of periods of qualifying Australian residence (any) and periods of residence in Denmark (after 1 January 1957) to meet any minimum periods to qualify for an Australian pension, for example, 10 years for Age Pension (Article 7.1)

Note:

• For the purpose of totalisation for Australian pensions, only periods of residence in Denmark or working life residence in Australia after 1 April 1957 can be used (Article 7.3)
• Adjoining periods of Australian qualifying residence and Danish periods of residence, with a break of up to 3 months in between can be considered to be continuous (Policy)

See Resources in International Social Security Agreements for examples of totalisation.

• are defined as periods of lawful residence, as defined in the Danish legislation
• must be certified by the Danish Competent Institution

Minimum Working Life Residence (WLR) to totalise

To be able to use the totalisation provisions, a person who is not an Australian resident at the date of lodgement must have at least 12 months Australian Working Life Residence (WLR) after 1 April 1957 of which 6 months must be continuous (Article 7.2(a)).

Note: unlike WLR for rate, this period cannot be rounded.

No minimum WLR is needed if the person is an Australian resident at the date of lodgement (Article 7.2(b)).

The Agreement allows the ongoing residence requirement for DSP and PPS to be met by customers who reside in Denmark (Article 5).

For customers outside Australia, the Agreement with Denmark (Article 8.1) refers to the overall rate calculation contained in section 12(1) of the Social Security (International Agreements) Act 1999.

This means customers paid under the Agreement have:

• a proportional rate paid according to their Australian Working Life Residence (WLR)
• the Rate Limiter/Limited Rate applied
• additional child amounts (s14A, SS(IA)A 1999) included, if eligible
• their Danish pension proportionalised (Randisi concession) for use in the income test using denominator of 300 (Article 8.1)

Note:

• In some circumstances, their partner's WLR may be used. See Working Life Residence (WLR)
• Autonomous customers, who are paid a proportional rate and in receipt of a Danish pension, will also have the Randisi concession applied to their Danish pension (Article 8.2).

Non-proportional rate extension

Customers paid under the Agreement and temporarily outside Australia, cannot have their non-proportional portability rate extended if they are unable to return to Australia.

Returns to Australia

The inside Australia rate applies immediately if a customer paid under the Agreement returns to Australia.

Customers in Australia under the Agreement are generally paid a direct deduction rate (Article 8.5).

The Agreement does not include a comparison rate in Australia.

Departures from Australia:

There is no temporary departure provision in the Agreement. The outside Australia rate applies immediately on departure regardless of the length of the absence.

Payments under the Agreement

Under the Agreement, provided the customer remains qualified, Australian payments are payable indefinitely in both countries, that is, for temporary or permanent absences (Article 5.1).

Third country portability under the Agreement

There is no portability to third countries for a customer paid under the Agreement.

If necessary, a customer who receives an autonomous payment that stops being payable due to portability reasons can transfer to the Agreement to continue payment if:

• the payment is covered by the Agreement
• the customer meets any payment limitations, such as severely disabled, and
• the customer is able to meet the lodgement provisions of the Agreement

If transferred to the Agreement, all Agreement rules apply to the customer, including portability and rate of payment.

See Transfer to international social security agreements.

A person who would be autonomously qualified but is paid under the Agreement can transfer from the Agreement to autonomous only if they are an Australian resident and in Australia.

On return to Australia, system processing will automatically transfer to from the Agreement to autonomous if the person is an Australian resident who has only used the Agreement to extend their portability while outside Australia,

Former resident provisions may affect customers who transfer to autonomous if they leave Australia again within 2 years of becoming an Australian resident.

Australian payments may be issued to customers outside of Australia. If the customer intends to be outside of Australia:

• long-term (12 months or longer), their Australian payment may be issued to an overseas bank account. See Overseas Bank Account Details (OBAD) for payment requirements by country.
• for less than 12 months, payment will generally continue to their normal Australian bank account every 2 weeks.

See Delivery of payments to Centrelink customers outside Australia.

For Denmark, the Agreement covers payments under the following Acts:

• Bekendtgørelse af lov om Social Pension - Social Pensions Act
• residence-based and state-funded system
• Arbejdsmarkedets Tillægspension (ATP) - Labour Market Supplementary Pension Act
• contributions based scheme

Main payments

Under the Social Pension Act:

• Folkepension - Old Age Pension (AGE)
• Førtidspension - Anticipatory Pension (INV)
• Senioropension - Senior pension (INV)

Under the Labour Market Supplementary Pensions (ATP) Act:

• Livslang Pension - ATP Lifelong Pension (ATP)

Note:

• ATP pension may be:
• referred to as Tillægspensionen (Supplementary pension) or Egenpension (Personal pension)
• paid as lump sum if amount is less than a certain annual amount. Otherwise paid as a monthly amount

Supplementary payments are paid in accordance with the Danish Pensions Act (Article 5.9):

• Personligt tillæg (Personal allowance)
• Pensionstillæg (Pension supplement)
• Bistandstillæg (Outside assistance allowance)
• Plejetillæg (Constant attendance allowance)
• Invaliditetsydelse (Disability benefit)
• Varmetillæg/Petroleumstillæg (Heating supplement)
• Mediecheck (Media allowance)
• Supplerende pensionsydelse/Ældrecheck (Supplementary pension allowance)
• Helbredstillæg (Health supplement)

The following known payments are paid by the Danish authorities but are not covered under the Agreement:

Pension Act benefits:

• Ventetillæg (Waiting allowance)
• Livsvarigt ventetillæg (Lifetime waiting allowance)
• 10-årigt ventetillæg (10-year waiting allowance)
• Engangstillæg + 10-årigt ventetillæg (One-off allowance + 10 year waiting supplement)

Labour Market Supplementary Pensions (ATP) Act benefits:

• Supplerende arbejdsmarkedspension (SUPP) (Supplementary Labour Market Pension)
• Ydelser ved dødsfald (Death benefit)
• Ydelser til ægtefæller og samlevere (Spouse or partner benefit)
• Tillægspension (Supplementary pension)

Other payments:

• Boligstøtte (Housing benefit)
• Ægtefællepension (Spousal pension)
• Tjenestemandspension (Civil servant pension)
• Børnepenge (Child benefits)
• Overgangsydelse (Transitional benefit)
• Kontanthjælp (Cash assistance)
• Uddannelseshjælp (Education assistance)

For help with:

• Assessment of Danish pensions, see Assessment
• Coding of Danish pensions, see Eligibility and Coding

The requirement to claim Danish pensions applies to Danish AGE, ATP and INV.

• Automated screening only applies to AGE, as the request for ATP claim forms is included in AGE claim pack
• When returned, the receipt of the ATP claim is added to Foreign Claim Details (FGD) screen

See Foreign pension claims.

The Eligibility and coding of foreign pensions tab contains detailed information on Danish payments that are subject to CFP legislation.

Claim packs are available for AGE and INV.

Note: AGE claim packs include a specific request for ATP claim papers if customers wish to claim ATP pension.

Claim packs are issued through the Foreign Pension System (FPS). See Assisting customers to claim a foreign pension.

Specific requirements for Danish claims:

The customer is to complete and provide the following:

All claims:

• APPLICATION FOR OLD-AGE PENSION/ANTICIPATORY PENSION (DK-AUS 2/1)
• Request for ATP Pension
• Document to prove nationality/citizenship. If:
• an Australian citizen - copy of an Australian passport (current or cancelled) or citizenship certificate
• a Danish citizen - a Danish passport (current or cancelled)
• a dual Australian/Danish citizen - proof of both Australian and Danish citizenship
• ATO certified Certificate of residence and tax liability (SKAT) form for non-Danish or dual Australian/Danish citizens only

Note:

• ATP pension claims are to be sent to ATP
• Danish AGE/INV pension claims are to be sent to Udbetaling Danmark

Requests for additional Information

If information provided with the claim for a Danish pension is incomplete, Denmark will send requests for information in Danish direct to customers.

Receipt of foreign pension claim by Services Australia

Under the Administrative Arrangements, Denmark forms can be lodged in Australia at any service centre. See Processing a foreign pension claim.

• All foreign pension claims and supporting documents must be scanned, and
• The original foreign claim form and copies of supporting documents must be sent in paper form to Centrelink International Services (CIS). See Processing a foreign pension claim

Centrelink International Services (CIS) only:

CIS will complete the following or arrange for the following to be completed as necessary and attach the documents to the foreign pension claim to send to the agreement country. See Agreement Liaison Detail (ALD) for method of transmission.

CIS staff are required to sign the relevant section of the claim form.

Ensure a copy of the ATO SKAT form is kept on file in case it needs resending. The completed claim cannot be sent to Denmark until the SKAT form is returned.

AWLR is not required for Danish pensions.

All claims:

• AUS187DK - Australia/Denmark Agreement on Social Security

A separate liaison is required for each fund, one for Udbetaling Danmark (for AGE and INV pension claims) and one for ATP (for ATP pension claims).

Do not send ATP pension claims to Udbetaling Danmark or AGE/INV claims to ATP.

For help with creating and completing the liaison form, see Agreement liaisons, NZ CICs and exchange of information.

INV only:

• Detailed Medical Report (DK-AUS3). See Foreign pension medical assessments
• Copy of existing Australian medical information

Enquiries about claims for Danish payments in Denmark or a third country should be directed to the Danish social security authorities.

Danish payments are paid by direct deposit in Australia. Payments are made through Danish Danske Bank.

Any queries about the non-payment of Danish pension should be directed to the Danish pension authorities.

Agreement pensions are paid as 12 regular monthly payments per year.

Other benefits or private pensions are paid monthly or annually.

Danish pensions must be recorded in the source currency - Danish Kroner (DKK). Official statements provide the foreign currency amounts.

Amounts recorded in source currency on the Foreign Pensions Details (FPD) screen must not be changed to the Australian dollar amount.

Note: payments into Australia are made in Australian dollars.

Danish payments are increased in January each year. However, Danish social pensions are subject to means-testing and may be subject to other variation.

For more information on bulk exchanges and auto adjusted CPI increases, see International Data Exchange Program and auto-indexation of foreign pensions.

• directly deducted (Article 8.5) and ignored in the income test (Article 8(8)(zc) Social Security Act 1991) for customers under the Danish Agreement who are in Australia)
• proportionalised and assessed as ordinary income (Article 8.1) for customers paid:
• under the Danish Agreement who are outside Australia
• autonomously who are on a long-term outside Australia rate
• ordinary income (not proportionalised) for customers paid:
• autonomously who are inside Australia
• under another agreement other than Denmark or New Zealand who are inside or outside Australia.

See Rate Calculation for when a direct deduction or proportional rate is applied.

Note:

• Danish AGE pension consists of basic amount (grundbeløb) and pension supplement (pensionstillæg)
• Danish INV pensions and certain social assistance payments (e.g. Unemployment benefit) may have deductions for contributions to ATP (e.g. Obligatorisk Pension - Mandatory Pension) or SUPP. The gross rate of Danish pensions, before any deductions, is maintained
• Obligatorisk Pension (Mandatory Pension) is paid as part of the ATP Lifetime Pension when the customer reaches Danish Age pension age
• Each member of a couple is deemed to receive half of the total amount received by the couple (Article 8.6)

Danish INV pensions

Denmark has 2 means tested INV pensions. Both are a form of early age pension awarded to a person who has a reduced work capacity.

• Førtidspension - Anticipatory pension
• over the age of 40
• ability to work is permanently and significantly reduced (cannot work a regular job or be in flexible employment)
• Senioropension - Senior pension
• no more than 6 years until customer reaches Danish age pension age
• 20 - 25 years of full-time employment
• a permanent reduced work capacity of 15 hours per week or less

Pension Act Supplementary payments, they include:

• Pensionstillæg - Pension supplement
• Bistandstillæg (Outside assistance allowance)
• Plejetillæg (Constant attendance allowance)
• Invaliditetsydelse (Disability benefit)

Bistandstillæg, Plejetillæg and Invaliditetsydelse are only payable to customers in receipt of a pre-2003 (old) disability pension.

• Ventetillæg - Waiting allowance
  Customers that postpone receiving their Danish age pension may be entitled to ventetillæg. There are 3 ways this payment can be paid:
• Livsvarigt ventetillæg - Lifetime waiting allowance: Lifelong monthly supplement to the Danish age pension
• 10-årigt ventetillæg - 10-year waiting allowance: The amount of waiting allowance is distributed between the basic amount and pension supplement as monthly supplements over 10 years with the Danish age pension
• Engangstillæg + 10-årigt ventetillæg - One-off allowance + 10 year waiting supplement: The basic component of the waiting allowance is paid out as a one-off payment whereas the supplement component is paid out as a monthly supplement over 10 years at grant
• Supplerende arbejdsmarkedspension (SUPP) - ATP supplementary labour market pension

Supplerende arbejdsmarkedspension (SUPP) is a pension customers can choose to pay into if they are in receipt of an early-age pension or Senior Pension (Seniorpension). When a customer reached Danish age pension age, they will receive an extra payment every month. If the customer passes away before their pension age, the estate is paid a lump sum.

• Tjenestemandspension - Civil servant pension
  payment age is generally 3 years before the national pension age
• Ægtefællepension - Spousal pension

Ægtefællepension is paid to separated or divorced spouse. The right to a spouse's pension expires if the eligible spouse enters into a new marriage.

• Boligstøtte - Housing benefit

Boligstøtte is a means tested payment for people who rent.

• Overgangsydelse - Transitional allowance

Overgangsydelse is a payment to assist a person who has lived less than 9 years within the last 10 years in Denmark and is unable to provide for themselves financially. For a person who has lived 9 years or more in Denmark, they may be entitled to a cash assistance (kontanthjælp) or education assistance (ddannelseshjælp).

Assessable lump sum payment

Lump sums may be a refund of contributions or payout of a small pension. For example, Engangstillæg + 10-årigt ventetillæg (One-off supplement + 10 year waiting supplement).

Foreign non-remunerative lump sums are assessed as ordinary income for 12 months from date of receipt (s1073 Social Security Act 1991). Where a customer is granted a lump sum payment in lieu of an on-going pension payment:

If the customer has a claim in progress on the FGS screen, FGD screen must be updated to FIN-NOM when FID coding is completed.

These payments are exempt income for customers paid under the Agreement or autonomously:

The following supplements are exempt for customers who are residing in Denmark (Article 8.3):

• Personligt tillæg - Personal allowance
  Personal allowance can be paid to customers in a difficult financial situation. It is:
• claimed as a separate payment
• paid with both the Danish Old age pension and Disability pension if eligible
• Varmetillæg/Petroleumstillæg - Heating supplement

Heating supplement is a subsidy given when consumer heating costs are over a certain amount

• Mediecheck - Media allowance

The media allowance is given to those pensioners who are entitled to a reduced media licence yearly.

• Helbredstillæg - Health allowance

Customer may receive a health allowance to help cover health expenses.

• Supplerende pensionsydelse/Ældrecheck - Supplementary pension benefit

Customer may receive a Supplementary pension benefit if their and their partner’s total liquid asset value is under a set threshold amount.

• Børnepenge - Child benefits

Payment for dependent children is exempt from the income test if the child meets the Australian definition of a dependent child (section 8(8)(j) Social Security Act 1991). Otherwise, it is assessed the same as the agreement pension.

ATP lump sum (engangsbeløb) bereavement payments and Ydelser ved dødsfald (Death benefits) are:

• exempt from the income test if payable to the person who incurred expenses associated with the bereavement
• assessable for 12 months from date of receipt (s1073 Social Security Act 1991). See Treatment of Lump Sums

The Agreement includes embargo provisions (Article 12.3) but they are not used.

Arrears debts for customers and their partners are raised under s1228A Social Security Act 1991 and recovered via normal methods under the Act. See Comparable foreign payment lump sum arrears debts.

When an arrears period is not provided, the arrears period end date may be assumed to be the end of the month before the date on the notice or liaison form.

A contravention debt may also occur if the customer does not advise of the grant of their Danish payment within their notification period. See Foreign Pension coding.

Life certificates are not used by Denmark.

Customers in Australia are sent notices (meddelelse) at grant and will receive an annual statement in between January and March each year.

Note: ATP customers are notified in December before any increase.