Disability pensioner with former working record and income at APW level. Single APW

It is assumed that the pensioner has a former working record with income at APW level. In this case he or she will get ‘anticipated’ pension points on that basis. It is further assumed that this will result in 4.03 pension points, just as in case 11 for the old age pensioner. On these assumptions the ‘ATP’ pension will be 86,018 SEK. The max. number of ‘pension points’ which can be earned is 6.5, resulting in a max.

additional pension of 138,739 SEK.

The basic pension consists of a basic amount of 36,300 × .98 × .90 = 32,017 SEK and a supplement of 36,300 × .98 × 1.115 = 39,665 SEK. The supplement is means-tested against ‘ATP’ (100 per cent), so in the case here there is no supplement.

The disposable income for the ‘APW-disability pensioner’ (full pension) is 32,017 SEK in basic pension plus 86,018 SEK in ‘ATP’ minus 32,113 SEK in personal taxation, in total 85,922 SEK.

The net compensation percentage is 85,922 / 136,994 × 100 = 62.7.

The decrease in disposable income is 37.3 per cent in this situation.

9. Disability pensioner without former working record. ‘Single APW’

The disability pensioner receives basic pension, cf. case 8. The basic pension con-sists of a basic amount of 36,300 × .98 × .90 = 32,017 SEK plus a supplement of 36,300 × .98 × 1.115 = 39,665 SEK, in total 71,682 SEK (full pension). The dispos-able income is 62,206 SEK. The basic pension consists of flat rate components.

The ‘net compensation percentage’ (relative to the APW) is 62,206 / 136,994 × 100

= 45.4.

The ‘decrease’ in disposable income, relative to that of the APW, is 54.6 per cent.

It should be noted that 86,000 SEK in ATP is reduced to a difference of approx.

24,000 SEK in disposable income between case 8 and 9 due to means testing and taxation.

10. Wife disability pensioner. APW-couple

It is assumed that the wife in the APW couple becomes a disability pensioner while the husband continues to work (APW income level). The wife has a working record earning ½ APW income. On this assumption she has 1.515 ‘anticipated’ pension points, resulting in a supplementary pension of 32,337 SEK.

The basic pension for a married disability pensioner consists of a basic amount of 36,300 × .98 × .725 = 25,791 SEK and a supplement of 36,300 ×.98 × 1.115 = 39,665 SEK. The supplement is means tested against the ATP pension leaving 7,328 SEK of the supplement. The total gross pension for the disability pensioner is 25,791 + 32,337 + 7,328 = 65,456 SEK.

The gross compensation percentage for the wife is 65,456 / 104,607 × 100 = 63. The disposable income for the couple is 136,994 SEK for the husband (APW income) and 55,980 for the wife receiving disability pension, in total 192,974 SEK.

The decrease in disposable income compared to the situation without disability pension is 209,747 - 192,974 = 16,773 SEK or 8.0 per cent.

11. Pensioner with maximum period of former occupation. Single APW Retirement at ’usual’ age, here 65 years

It is assumed, that the APW has gained pension rights for 30 years (that is a ’full’

period in the present Swedish additional pension scheme). This is also feasible, since the system started in 1960. It is further assumed, that the average number of ’pen-sion-points’ is 4.03 (the actual number in 1989). This average is slightly increasing over time.

On these assumptions the additional pension (ATP) will be 86,018 SEK in 1997.

The max. number of ’pension-points’ which can be earned is 6.5, resulting in a max.

additional pension of 138,739 SEK in 1997.

The basic pension in the Swedish system is based on the basic rate (’basbeloppet’) which in 1997 was 36,300 SEK. The basic pension consists of two components, a basic amount which equals 36,300 × .96 × .98 = 34,151 SEK (single pensioner) and a supplementary amount, 36,300 × .555 × .98 = 19,744 SEK. The basic pension is then 53,895 SEK for a single pensioner. If the pensioner has no additional income he or she pays no taxes. When the pensioner has income from the additional pension scheme the supplementary amount in the basic pension is means tested and reduced by 1 SEK for each SEK in additional pension.

The disposable income for the ’APW-pensioner’ is 34,151 SEK in basic pension plus 86,018 SEK in ’ATP’ minus 32,841 SEK in personal tax, in total 87,328 SEK.

The net compensation percentage is 87,328 / 136,994 × 100 = 63.7.

The decrease in disposable income by retirement is 36.3 per cent in this situation.

12. Pensioner without former occupation. ’Single APW’

’Retirement’ at ’usual’ age, here 65 years

The pensioner receives basic pension, i.e. 53,895 SEK, cf. the former case. The basic pension is not taxed (there is a standard deduction designed in such a way, that single and married pensioners, only receiving the basic pension do not pay personal tax). The basic pension consists of flat rate components. The disposable income is 53,895 SEK.

The ’net compensation percentage’ (relative to the APW) is 53,895 / 136,994 × 100

= 39.3.

The ’decrease’ in disposable income, relative to that of the APW, is 60.7 per cent by this kind of ’retirement’.

13. Pensioners with maximum period of former occupation. APW-couple The two pensioners have the same age, and both retire 65 years old

It is assumed, that the wife and husband have gained pension rights for 30 years each. The husband is ’identical’ to the single pensioner in case 11. The wife is as-sumed to have had half the income of her husband all the time, that will result in 1.515 ’pension points’ when the husband has 4.03 according to the Swedish ’ATP’

scheme. On these assumptions the additional pension (ATP) will be 86,018 SEK for the husband and 32,337 SEK for the wife, in total 118,355 SEK in 1997. The max.

additional pension is 138,739 SEK for each spouse in 1997.

The basic pension is equal to the basic amount, i.e. 36,300 × .785 × .98 = 27,926 SEK for each of the pensioners, in total 55,852 SEK. The couple will not receive any supplementary amount.

The disposable income for the APW-couple as pensioners is 55,852 SEK in public pensions plus 118,355 SEK in additional pension minus 37,411 SEK in personal tax, in total 136,796 SEK.

The net compensation percentage is 136,796 / 209,747 × 100 = 65.2.

The decrease in disposable income compared to the APW-couple is 34.8 per cent.

Standard’ income events in connection with children 1-3. The couple has 1, 2 or 3 children

For child no. 1 (6 years old) there is a family allowance of 7,680 SEK in 1997.

Compared to the situation without children the increase in disposable income is (7,680 / 209,747) × 100 = 3.7 per cent with 1 child (6 years old). The family allow-ance is a flat rate benefit.

For child no. 2 (3 years old) the allowance is also 7,680 SEK. Compared to the situation without children the increase is (15,360 / 209,747) × 100 = 7.3 per cent with 2 children (6 and 3 years old).

For child no. 3 (1 year old, assumed born in 1997) the allowance is also 7,680 SEK.

Compared to the situation without children the increase is (23,040 / 209,747) × 100

= 11.0 per cent with 3 children (6, 3 and 1 year old).