In mid-2022, Sweden's parliament passed a 300-page bill raising the retirement age for people born in 1958 to 66.
At the same time, they raised the age at which people born in 1957 would qualify for a whole range of retirement-related benefits to 66, despite many in this group retiring at their official retirement age: 65.
“It’s very complicated, because it only affected the people born in ‘57,” O’Brian told The Local. “So the retirement age was increased for the people born in ‘58, which was publicly announced in a 300-page bill. And there were only two pages of this motion concerning the people born in 1957.”
In these two pages, the bill stated that those born in 1957 would be able to retire at their pension age – 65 – but that the tax cuts and other benefits, like lower employer contributions for the self-employed, which pensioners usually qualify for, wouldn’t kick in for them until a year later, when they turned 66. This effectively meant that they were the only group ever who had to pay taxes at this higher rate for the first year of their retirement.
O’Brian estimates that the government gained 5 billion kronor – 3 billion in income taxes and 2 billion in employer contributions – as a result of this.
The government did not inform people in the affected year group of the change, and O'Brian struggled initially to determine whether it was actually going to happen or not.
“It was cleverly hidden among the other 298 pages which concerned people born in 1958,” he said.
READ ALSO:
- Ten key questions to help you plan your Swedish pension now
- How to maximise your Swedish pension – even if you're not planning to stay
The law was changed in May 2022. Around six months later, O’Brian started to hear rumours that his year group would not be eligible for the promised tax cuts the next year.
“I thought ‘how could this be?’ That’s deliberate and blatant age discrimination by the Swedish government against just one year group, with absolutely no warning. And then we weren’t informed at all, even after it had been changed.”
He checked the website of the Pensions Agency, which still – incorrectly – said that pensioners would be eligible for the basic tax-free allowance the year they turned 66, as well as a cut in the egenavgifter fees for the self-employed from 31 percent to 10 percent.
“Then I called the Tax Agency, introduced myself and said ‘I own my own company and I heard some rumours that the employer tax – arbetsgivaravgift – is not going to go down for those of us born in 1957. The woman said: No, no, ta det lugnt, take it easy. The taxes will be lower, as planned, nothing’s changed. So I said ‘can you send that to me in writing’. And then she called me back to tell me ‘oh, I was wrong, actually, you’re going to pay an extra year’.”
O’Brian’s first reaction was to write to his local politician – the Swedish equivalent of writing to your local Congressman or MP.
“In America, which is clearly far from perfect, at least you know who your representative is. But here... you don’t know who’s representing you. I found someone here, a young woman in the Riksdag from Helsingborg but she was not at all helpful – she actually made a repulsive sexist joke about the situation. So then I started writing letters straight to the higher levels of the government.”
In September 2022, the government changed, with the Moderates, in coalition with the Christian Democrats and Liberals, and with the support of the Sweden Democrats, taking over from the Social Democrats, who were originally responsible for the tax change.
“The Moderates are known as a low tax, fair tax party,” O’Brian said. “So I wrote to them, thinking ‘they’ll fix this in five minutes.”
Things didn’t quite turn out how he had expected.
“I wrote perhaps 20 mails to various Moderates and basically got the reply ‘sorry, the previous government did this’. Which isn’t true, because the Moderates voted for that change as well.”
After this, O’Brian decided to take his story to the media, with Scanian newspaper Helsingborgs Dagblad (HD) picking up the story, which was then published in HD and its sister newspaper, Sydsvenskan.
He also started a Facebook group for other people in the same situation as him, titled Född 57 – Åldersdiskriminerad och Straffbeskattad av Riksdagen (Born 57 – Age discriminated against and penalty taxed by the Riksdag). The group eventually grew to over 6,500 members. There are around 112,000 people living in Sweden who were born in 1957.
Out of this Facebook group came a local group of Helsingborgers who were affected by the law change, who, along with O’Brian, started to organise protests with group members from all over Sweden.
“The government mostly ignored us, or if we got any reply at all it was simply ‘No, we’re not going to change anything’. So some of the Facebook group members organised a small protest in Stockholm, and then a larger one, and the government still tried to ignore us. So we planned a third protest to take place the day before the opening of [Sweden’s parliament] the Riksdagen in September.”
“We started organising and realised we were gonna have probably four or five hundred people coming. Finally, a week before the protest, they caved and said ‘okay, okay, we’ll give you the money back.”
“It was an enormous victory. I woke up on a Saturday morning and opened Facebook, and saw this: Nu ska vi kompensera 57:orna [Now we are going to compensate the 57’ers]. I said to my wife ‘am I awake, or am I dreaming?’”
O’Brian describes the government’s slow response in agreeing to give his year group their money back as “incredibly disappointing and frustrating”.
“Some people in the group, it turns out, are living on a pension of 13 or 14,000 kronor a month, before tax. That’s very low.”
“And the government had no problem with trying to secretly take extra tax money from them. I did an Excel spreadsheet, and it showed that the people with the lowest income were getting the highest percentage increase in tax compared to what was promised.”
“And the tax numbers for self-employed were ridiculous,” O’Brian added.
For the self-employed, they didn’t just have to pay extra income tax, but also much higher employer contributions too. This meant that people who took out a salary of between 10 and 40,000 kronor had a total tax bill of between 111 and 154 percent more than expected.
“I took about 20,000 a month salary last year, and I had to pay 154 percent more than what was promised – two and a half times what I was supposed to be paying.”
Many of those affected had planned to retire at 65 for some time, meaning that they couldn’t change their plans once they discovered they would be taxed at the higher rate for a year longer than expected.
The way that Sweden's government has handled the issue has left O'Brian disappointed in Swedish politicians.
“Our supposed leaders rudely, secretly, drastically changed the rules of the game when it was almost over... and they didn’t even tell us, before or after doing so,” O'Brian said.
“I’ve lived in Sweden for 26 years and I love it here. But everyone knows that Swedish politicians sometimes pretend to be the moral conscience of the world. When it’s happening right in front of their faces, though, when we’re being discriminated against and paying penalty taxes, they want to just sweep it under the rug and ignore us. That’s very arrogant and totally disappointing.”
O’Brian believes that the government was expecting his year group to either not notice the tax change, or to be too conflict-averse to challenge the decision.
The fight for the 57’ers isn’t over yet. Despite the government setting aside 3.2 billion kronor in its budget to refund the year group's extra taxes, 2 billion kronor in extra employer fees for self-employed people still remain.
“They still haven’t fixed the self employment fees yet, and they’re doing the exact same thing they did with the income tax, saying ‘we can’t do anything, we have other spending priorities’... but we’ve won 90 percent of the battle.”
The money is scheduled to be repaid directly to the tax accounts of the affected year group, although it is not yet clear whether the government will pay any interest.
Bizarrely, O’Brian even discussed the tax change, in a very roundabout way, in a supermarket in the French city of Nice in March 2022 with former prime minister Stefan Löfven, who happens to also have been born in 1957.
“At that point, I didn’t know anything about this tax rule change. I was renting an apartment with my wife in Nice and she said ‘we need yoghurt for breakfast, can you go to the store?’”
“I walk into the store, into the yoghurt section, and I look at a guy and think ‘he looks familiar’, and say: ‘you’re Stefan Löfven!’ And he said ‘yes, yes I am.”
After introducing himself, O’Brian explained that he lives in Sweden, and asked Löfven, who had just stepped down as prime minister, about his retirement plans, before remembering that they were both born in the same year.
“‘57, that was a good vintage’, he said. So I smiled, and I said ‘maybe you should start your own company. You’re turning 65 this year, like me, and the income taxes and employer contributions go down a lot after 65.’”
Instead of continuing the conversation, Löfven changed the subject.
“He just said: ‘can you tell me: which yoghurt do you think is best here in France?’”
“I don’t think Löfven engineered this problem, it was his finance minister and successor [as prime minister], Magdalena Andersson,” O’Brian said.
“When I spoke to him, I had no idea we were being cheated. I have a feeling that he might have had an idea about the ‘57 tax steal, but he just changed the subject to which yoghurt was best. It’s rather humourous to think about that conversation now.”
Comments