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Government maintains support for residency clause in Danish unemployment insurance

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Government maintains support for residency clause in Danish unemployment insurance
Minister of Employment Troels Lund Poulsen. File photo: Mads Claus Rasmussen/Ritzau Scanpix
18:08 CEST+02:00
Stricter qualification requirements relating to EU residency in Denmark’s a-kasse unemployment insurance system look set to come into effect from next year, potentially impairing the viability of the system for people who have lived abroad.

A parliamentary majority remains in favour of the stricter rules, despite concerns being raised over their impact on groups including returning foreign-based Danes and people who have moved to Denmark from non-EU countries.

The rule changes in question relate to eligibility for unemployment insurance, dagpenge in Danish, for which a monthly fee is paid to a provider known in Denmark as an a-kasse.

Under current rules, citizens of non-EU and EEA countries with permission to reside in Denmark must have been a-kasse members for one year and have worked full-time in Denmark for one year in order to qualify for the unemployment insurance.

Those requirements are made significantly stricter in the proposed reform, in which all a-kasse members will need to document residence in Denmark or another EU or EEA country for seven of the last eight years in order to be eligible.

READ ALSO: Unemployment insurance curbs could create administrative jam for internationals in Denmark

Money saved by the proposals has already been reallocated for tax cuts, employment minister Troels Lund Poulsen told parliament on Tuesday as the residence requirement was debated for the first time by lawmakers.

As such, the proposal requiring residence in Denmark during seven of the last eight years in order to qualify for the unemployment insurance is unlikely to be reversed.

The requirement was given the backing of the government and parliamentary ally the Danish People’s Party (DF) in February, in a package which implemented tax cuts to the tune of 500 million kroner.

READ ALSO: Foreigners will help pay for Denmark's tax cuts as welfare rules tightened

The Social Democrats, the largest party in opposition, have said they are prepared to vote for the proposal but favour a more lenient residency requirement of seven of the last 12 years. 

While other opposition parties are against the proposal, DF’s votes alone are enough to secure the majority required for the government to pass the bill.

Poulsen said the Social Democrat-proposed revision was unlikely to gain traction as “It would require revenue that is not there, and the money has been spent”.

The government expects almost 200 million kroner to be saved on dagpenge payments once the residency requirement is fully implemented.

The minister said he had asked officials to calculate the saving provided by the version of the rule proposed by the Social Democrats, but suggested he did not expect it to be large.

The residency requirement means that people who currently live in non-EU countries – and are fee-paying a-kasse members – would not automatically be entitled to the unemployment insurance payouts after returning to Denmark.

It would also potentially affect people who currently live in Denmark but have lived outside of the EU at some time within the last eight years.

The new requirements are expected to take partial effect on January 1st next year, with the rules being phased in gradually, taking full effect by 2021. In 2019, the requirement will residence in Denmark or the EU for five of the last eight years.

During the debate, Red-Green Alliance MP Finn Sørensen called the proposal “pure class warfare”, while Karsten Hønge of the Socialist People’s party said the government and DF were giving normal wage earners “a kick in the shins”, according to Ritzau's report.

READ ALSO: Internal division over proposed curbs on Danish citizenship: report

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