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Danish unemployment benefit overhaul in place

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Danish unemployment benefit overhaul in place
Parliament's three largest parties are backing the deal. Photo: Linda Kastrup/Scanpix
19:57 CEST+02:00
The government reached an agreement with the Danish People's Party and the Social Democrats on Thursday that entails significant changes to the unemployment benefit known as dagpenge.
Three days after the release of a commission's long-awaited report on how to overhaul Denmark's dagpenge scheme, a plan is in place that largely mirrors the panel's recommendations. 
 
Among the changes are a new recording method that will measure the benefit by hours rather than weeks, a re-accrual scheme that will allow the unemployed to earn additional time on the benefit, and the implementation of three “waiting days” per year on which the unemployed will not receive the benefit payment. 
 
 
The commission had proposed two waiting days per quarter, but the government's deal cut that number down and to make up for the lost savings agreed to drop the dagpenge benefit for new graduates down to 71.5 percent of the maximum level rather than the commission's suggested 78 percent. 
 
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. 
 
The employment minister, Jørn Neergaard Larsen, said that the benefit system's changes should encourage the unemployed to find work. 
 
“We have created a dagpenge system that motivates more employment and ensures security,” he said when presenting the deal. 
 
Finance Minister Claus Hjort Frederiksen of the ruling Venstre party said that by striking a deal with political rivals the Social Democrats the unemployment benefit would no longer be “a political battlefield”.
 
 
The new dagpenge agreement comes after a long-running political fight that dates back to the previous Venstre government's 2010 decision to halve the amount of time unemployed individuals could receive dagpenge from four years to two and doubled the amount of time one must work in order to qualify for the benefit from 26 to 52 months. 
 
With Venstre, Social Democrats and the Danish People's Party backing the deal, it has enough support to pass parliament. The new dagpenge system is scheduled to begin in 2017 but the parties must still find a way to make up for a 300 million kroner deficit. 
 
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