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Foreigners can help to pay for tax reform: Danish finance minister

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Foreigners can help to pay for tax reform: Danish finance minister
Finance Minister Kristian Jensen. Mads Claus Rasmussen/Scanpix
15:30 CEST+02:00
Denmark's government is seeking to introduce requirements which will limit the access of foreign residents to the country's welfare system.

Savings made from new curbs could help to finance tax cuts in several areas announced by the government on Tuesday, reports broadcaster DR.

New regulations proposed by the government would prevent in principle non-Danish citizens from being eligible for certain welfare payments (known in Danish as overførselsindkomster) from their first day in the country.

“I was keen for people to be unable to come to Denmark and receive welfare payments before entering the labour market,” Finance Minister Kristian Jensen told DR.

Jensen did not specify exactly which forms of welfare would be cut for foreign residents in Denmark.

But the minister said that a report filed by a government committee prior to the formation of the current coalition in November last year had shown that money could be saved by making cuts in the area.

“I imagine that we will look at the catalogue that was written with regard to the different options for accrual requirements. I think it is completely fair for those that receive Danish welfare to be required to contribute to society first,” he said.

The previous, Social Democrat-led government was in 2013 forced to scrap a similar accrual requirement for child welfare payments after it was informed by the EU Commission that Danish rules on the payments were not in accordance with those of the union.

But the nationalist Danish People's Party, a parliamentary ally of the coalition, said that the option of introducing similar requirements would be a viable part of discussions to put the government's new tax plan through parliament.

“It is actually something we have been flag bearers for, in order to protect our welfare system,” the party's finance spokesperson René Christensen told DR.

Christensen mentioned the state grant given to students (statens uddannelsesstøtte, SU) as one area in which money could be saved.

“People that come to Denmark to study actually have full access to SU. We don't think they should,” he said.

Several requirements must be fulfilled for foreign residents to qualify for the Danish state student grant.

EU rules sate that citizens who work for 10-12 hours per week, have worked in Denmark prior to commencing their studies, or have already lived in the country for at least five years can qualify for the grant, according to regulations published on the SU website.

Non-EU citizens can receive SU under Danish law if they are married to a Danish citizen, have lived in the country for over five years, moved to the country with their parents, work while studying, are covered by integration laws or are part of the Danish minority population in northern Germany.

“We think that there should be access to education, but not to welfare payments,” Christensen said to DR.

The MP said a “relatively large amount” could be saved by denying foreign citizens SU, but declined to give a specific figure.

According to the government's own calculations, 15 billion kroner (two billion euros) are required to finance the proposed tax reform.

Details of how this will be done are set to be presented by the government on Thursday.

READ ALSO: Denmark government drops plan to cut tax for rich

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