Government announces tax cut for pensioners
Today, the government announced a proposal to cut taxes on pensioners as part of the upcoming autumn budget.
The proposal means that seniors over 65 who earn a pension of SEK 14,000 per month would receive an estimated tax cut of SEK 200 each month. There are some 1.4 million pensioners who would benefit from the change.
In 2006, the center-right Alliance government introduced a tax credit for those who are currently employed. This benefit does not apply to individuals on sick leave, maternity leave, or pensioners. It has received harsh criticism for being unfair as it creates a larger tax gap between those working and retirees. Social Democrat Prime Minister Stefan Löfven says he wants to change that.
"We have a new situation with the Swedish economy. We have a surplus in public finance which is why the government can now take another step towards reducing the tax gap between wage-earners and pensioners," Löfven said at the press conference on Thursday.
In their 2014 party platform, the Social Democrats promised to get rid of what they termed the “unfair tax penalty for pensioners”. If the change goes through, the Social Democrats would fulfill one of their campaign promises ahead of the 2018 elections.
The exact details of the proposal are still being worked out, but the measure would go into effect January 1, 2018, if approved by parliament this autumn.