Important information about the guarantee pension

The EU Court of Justice made a decision in December 2017 that the Swedish guarantee pension should only be paid to persons residing in Sweden. Thus not to those residing in, for example, Spain.

The guarantee pension is a basic protection in the general Swedish pension system intended for those who have had little or no employment income during their working life. You are entitled to guarantee pension if you have been resident in Sweden for at least three years. The guarantee pension can amount to a maximum of SEK 8,076 per month for single persons and SEK 7,204 for married persons. Of the affected recipients, 43,000 pensioners live outside Sweden but within the EU/EEA and approximately 2,000 of these live in Spain.

The EU ruling affects these 43,000 pensioners very severely since for this group there is essentially only the guarantee pension available. For many pensioners, the guarantee pension is the only income. And with the EU ruling from December 2017, it is prohibited to pay out a guarantee pension from Sweden to anyone who does not live in Sweden but within the EU/EEA area.

The Swedish government has appointed an investigation that will propose how this ruling should be handled. The affected 43,000 pensioners who are resident within the EU/EEA will be affected so severely that the government will continue to pay out the guarantee pension for the time being. This will continue until the investigation is completed.

Overall, the outlook appears bleak for those living within the EU/EEA and receiving guarantee pension, but current rules will likely remain in effect until 2020. It should be noted that all political parties supporting the pension system are united on this issue.

Should you have any questions, please feel free to contact us at Global Accounting.