Denmark’s unemployment benefit known as dagpenge (literally 'day money') is a voluntary unemployment benefit administered via state-subsidized private organizations known as a-kasser. The benefit pays a maximum of 17,918 kroner ($2,731, 2,402 euros) per month.
A commission established in June 2014 by the previous Social Democrat-led government was set to release its long-awaited recommendations on Monday, which if implemented would make it easier for the unemployed to earn the right to extended time on the benefit.
Even with the changes however, as nearly 7,000 people are still expected to fall out of the system each year, adding to the as many as 60,000 who have lost the benefit since it was overhauled in 2010.
News agency Ritzau obtained the recommendations before the report’s official release. The key points include:
- New recording methods. Currently, the use of dagpenge is measured by weeks and an unemployed individual who takes odd jobs still risks using an entire week of their benefit. Under the recommendations, the benefit will be earned and used in hour increments, encouraging the unemployed to take smaller and more temporary jobs.
- Re-accrual. Likewise, the work done while on the benefit will allow the unemployed to earn additional time on dagpenge. One day of work will result in two extra days under the benefit, allowing individuals to extend their time on dagpenge by two to three years.
- Calculation of payments. If an unemployed individual takes a job at a lower salary than their last full-time position, they will no longer have their dagpenge payments lowered.
- “Waiting days”. Two waiting days (karensdage) will be implemented every quarter. The unemployed will not receive payment for those days unless they have worked for at least one week per month in the preceding period.
- Lower payments for new graduates. New grads on the dagpenge system will see their payments decrease from the current 82 percent of the maximum dagpenge rate to 78 percent.
- Long-term limits. If an individual has received four full years of the unemployment benefit over an eight-year period, their right to future dagpenge will be shortened by one month.
- 6,700 will fall out of the system. According to the commission, if all of its recommendations are implemented an estimated 6,700 people will still lose their right to dagpenge each year. That is significantly more than the roughly 2,000 who lost their right to the benefit before it was overhauled in 2010 but less than the 9,000 who will fall out of the system every year under the current rules.