Faroese government to raise pension income threshold

The Faroese government plans to increase the income threshold for pensioners before benefits are reduced, according to a coalition agreement cited by MP Sámal Petur í Grund.

Margit Stórá, minister of social affairs and health, confirmed she has no intention of abolishing the pension income deduction system. The current rule allows pensioners to earn up to 61,900 krona annually without deduction, with a 20% reduction applied to earnings beyond that. Under the proposed change, the threshold would rise to 300,000 krona, but the deduction rate would increase from 20% to 30%.

Helgi Abrahamsen, leader of the Union Party, noted that while public opinion remains divided, the coalition parties had reached a compromise to implement the change, expected to take effect on 1 January 2027 pending parliamentary approval after the summer recess.