Foreigners will help pay for Denmark’s tax cuts as welfare rules tightened

A new tax deal agreed earlier this week will be financed in part by user payments for Danish language lessons and tougher social welfare rules for foreigners.

Foreigners will help pay for Denmark's tax cuts as welfare rules tightened
Photo: vichie81/Depositphotos

Stricter conditions will be placed on foreign citizens in relation to social welfare payments including unemployment support (kontanthjælp or dagpenge in Danish) as a direct result of a new tax plan agreed between the coalition government and parliamentary allies.

The tax cuts amount to around five billion kroner (670 million euros) reports Ritzau.

The cuts are expected to give Danish taxpayers an annual windfall in the range of 1,850 to 3,150 kroner, newspaper Jyllands-Posten reported earlier this week.

A plan for a more comprehensive tax reform was scrapped last month after political parties failed to find common ground during negotiations.

The agreement which was reached on Tuesday will be financed in part by introducing a requirement to have lived in Denmark for a specified length of time before the right to the employment-based dagpenge payment becomes vlid.

New demands will also be introduced, requiring the basic kontanthjælp support payment to also be 'earned'.

“Qualification principles send the signal that the precondition for access to full social welfare is that the person has a strong connection to Danish society and has contributed to it over a number of years,” reads the text of the announced tax plan.

In addition to the qualification requirements, members of unemployment insurance funds (known in Denmark as a-kasser) will be ineligible for unemployment benefits from those funds until they have lived in Denmark or another EU or EEA country for at least seven of the last eight years.

That condition will not apply to Danes working in foreign postings for employers within Denmark.

Living or working abroad for a year or more within the last seven years will also result in the right to unemployment insurance payouts lapsing, Ritzau reports.

Foreign citizens who do not fulfil the relevant requirements may be entitled to the lower integration support payment (integrationsydelse), if conditions for that form of support are met.

Those receiving the state income welfare payment known as kontanthjælp will now be required to have lived in Denmark for nine of the last ten years – a curb on the previous seven out of the last eight years.

That is supplemented by an additional requirement of employment for at least two and a half of the last ten years for a foreign citizen to become entitled to the payment.

The government is also set to make newcomers to Denmark – including those in work, students and EU citizens – pay for their Danish lessons.

Previously-free language classes will now cost 2,000 kroner (268 euros) per module, adding up to a total of 12,000 kroner (1,600 euros) if all six modules are taken, as is a requirement for a broad range of residence permit forms.

“Tuition fees and deposits will provide an incentive for only self-sufficient, motivated students to take classes,” the text of the tax agreement reads.

Language school students will be expected to pay for their classes from July 1st 2018.

Editor's note: A previous version of this article omitted the fact that unemployment insurance fund members are entitled to unemployment payments if they have lived in EU/EEA countries, as well as in Denmark, for a total of seven of the last eight years. The omission has now been corrected.

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

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Danish government to increase spending on low-income families

A political agreement between the governing Social Democrats and allied parties has secured financial support for Denmark’s lowest-income families.

Danish government to increase spending on low-income families
File photo: Ólafur Steinar Gestsson/Ritzau Scanpix

A temporary measure will divert 250 million kroner of spending to families encompassed by the reduced form of welfare for recently-arrived foreign nationals including refugees (integrationsydelsen); and to those for whom an upper limit on the amount a household can receive in social welfare applies (kontanthjælpsloftet).

Around 27,900 children are expected to benefit from the new subsidy, Ritzau reports.

Employment minister Peter Hummelgaard confirmed the government initiative.

“We have seen the stories piling up about families not being able to afford children’s winter clothing or leisure activities or about children going to school without any lunch at the end of the month,” Hummelgaard said.

“This is what we want to take action on and thereby live up to promises made when the government support paper [between Social Democrats and support parties, ed.] was signed,” he added.

The Social Liberals, Socialist People’s Party and Red Green Alliance have all agreed to the spending, which will enable it to pass parliament.

All three of those parties want to scrap the two measures restricting welfare payments for certain families.

The new subsidy will apply until a government commission submits recommendations on how to reform the two types of restriction. That is expected no later than summer 2020.

READ ALSO: Frederiksen becomes PM after left-wing parties reach deal