The tax cuts for pensioners have been a key policy issue for one of the smallest government parties, the Christian Democrats, and is worth SEK 2.5 billion. That is twice the figure previously proposed, and could mean a tax cut worth SEK 100 a month for pensioners, the government claims.
Sweden's main opposition party, the Social Democrats, said the tax gap between workers and retirees is widening in Sweden in spite of the coalition's latest announcement.
"The problem is that despite this tax cut and the government's tax policies, the injustice in the tax system continues to increase between pensioners and the work force," said Magdalena Andersson, the party's economic policy spokesperson.
Curt Persson, chairman of the pensioners' association PRO, welcomed the tax change though added the savings it created was minor.
"Its not a huge increase but for a person earning a bare-minimum government pension, who lives on a meager income, all increases are good," he said.