It is now possible to have all your frozen holiday allowance paid out. If you had your holiday allowance paid out in autumn 2020, you can choose to have approximately two weeks’ holiday allowance paid out. If you have not previously had your holiday allowance funds paid out, you can now have up to five weeks’ holiday allowance funds paid out. You can also choose to leave your holiday allowance funds in The Holiday Allowance Fund.
To be entitled to frozen holiday allowance, you must have been an employee and covered by the Holiday Pay Act during the period from 1 September 2019 to 31 August 2020. The amount you can claim is what you are entitled to. That is, the amount your employer has calculated your holiday allowance funds to be, minus any amounts you have already received in 2020. You cannot choose to have only part of the amount paid out. The full amount will be paid out, so that you clear your savings account with the Holiday Allowance Fund.
You must request the payouts for your holiday allowance funds yourself – they do not happen automatically. You can do this by going to borger.dk/bestil-feriemidler and logging in with NemID. Once you have requested your holiday allowance funds, you cannot cancel the payouts.
You have plenty of time to receive your payment
You can apply for your holiday allowance funds from today, 24 March, up to and including 31 May 2021. This means you have more than two months to apply for the payouts and consider what is best for you. The payouts will not be offset against your state benefits. You can read more about this at ld.dk.
The aim of yet another early payout of frozen holiday allowance funds is to stimulate the Danish economy, which has been hit hard by the coronavirus crisis. If you need your holiday allowance funds right now for spending, it is therefore a good idea to have them paid out for the benefit of Danish society. Your holiday allowance funds are also available to you in The Holiday Allowance Fund. Here, your savings will be invested and managed by LD Pensions to maximise the benefits for you.
Monthly returns and special terms and conditions
When you have savings in the Holiday Allowance Fund, they grow over time as you share in the profits that LD Pensions generates for the Holiday Allowance Fund. Your share of these returns is your return, which is calculated once a month. As things stand, your savings have, for example, already grown by 1.0%.
Your return consists of both LD Pensions’ investment return on the holiday allowance funds that employers have paid into the fund, and interest income on the holiday allowance funds that employers leave within their companies. This makes up the fund’s profit, of which you receive your share.
Your savings in the Holiday Allowance Fund can be paid out when you leave the labour market. It is a pension lump sum with attractive terms. The annual return is taxed at a lower rate than returns on unrestricted funds saved in a bank account. Your savings do not affect the annual amount you are allowed to pay into a retirement savings scheme or an instalment pension. Payouts from the Holiday Allowance Fund do not reduce your state pension supplement.
Further information
There are several advantages and disadvantages to bear in mind. You can read much more about this here on ld.dk.
