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Minister to face questions over impact of foreign residency clause on Danish unemployment benefits

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Minister to face questions over impact of foreign residency clause on Danish unemployment benefits
Minister of Employment Troels Lund Poulsen (L) will face questions over the implementation of new residency demands on unemployment benefits. File photo: Mads Claus Rasmussen/Ritzau Scanpix
10:54 CET+01:00
New rules are set to be introduced on January 1st, 2019 inserting more stringent demands over foreign residency in unemployment insurance claims.

But the new rules could create an administrative backlog preventing on-time payments for people due cover, according to service providers.

Stricter qualification requirements relating to EU residency in Denmark’s a-kasse unemployment insurance system are scheduled 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 criticism over their impact on groups including returning foreign-based Danes and people who have moved to Denmark from non-EU countries.

But the Social Democrats, the largest party in opposition, are considering withdrawing support amid concerns raised by the a-kasse service providers over the difficulties likely to arise enforcing the rules, newspaper Politiken reports.

Minister of Employment Troels Lund Poulsen is scheduled to respond to questions at a parliamentary committee hearing on Wednesday.

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: Government maintains support for residency clause in Danish unemployment insurance

The task of documenting the whereabouts and employment history of members – whether foreign or Danish citizens -- who have spent time abroad will fall to a-kasse administrators.

“It will be interesting to see where we get that information from. Not all countries have that information and if they have, they are not obliged to give it to us as far as I’m aware,” Verner Sand Kirk, director of industry representative body Danske A-kasser, told Politiken.

Kirk told The Local in September that the new rules could potentially make Denmark less attractive to skilled foreign workers.

“The (non-EU or EEA citizens) who will be affected by this are people who are already required to have worked full time for one year if they have moved to Denmark. That is already a very strong protection against potential exploitation of the system. Hardly anyone would travel to Denmark, work full-time for a year and pay into an a-kasse with the intention of later becoming unemployed,” the Danske A-kasser director said.

“We can’t claim that we’re pleased to see skilled people coming in from other countries while also telling them they can’t be insured if they lose their jobs,” he added.

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

According to Politiken’s report, a survey conducted by Danske A-kasser amongst its member organisations – which have a total of over two million members -- revealed that 20 out of 23 providers expect the residency clause to result ‘to a high degree’ in problems such as delayed payments due to insufficient information. The remaining three organisations said they expected ‘some degree’ of impact.

Social Democrat spokesperson for employment Leif Lahn Jensen is set to question Poulsen over the issue at Wednesday’s committee. Jensen told Politiken he was keen to find out the potential cost of administrative backlogs and the risk of unemployment benefit payouts being delayed as a result of the new condition being introduced.

“This is currently completely unclear,” Jensen said to Politiken.

The newspaper has also reported that up to 1,400 people currently receiving sick or parental leave benefits risk losing that right in coming years as the rule change is phased in. Those people will instead be required to apply for the lower integration benefit (integrationsydelse).

This may constitute an illegal discrimination against sick and pregnant people, according to remarks made by government legal advisors in comments appended to the proposed law change, Politiken writes.

The Social Democrats, who were previously in support of the stricter residency requirement, are now considering a change in position in light of the many potential complications associated with it.

“This issue has proved to be somewhat complex and quite poorly prepared by the government,” Jensen said to Politiken.

“I’m actually becoming more and more uncertain about where we will end up. I can’t say where we stand at the moment, because I really think this is becoming more and more of a mess,” he added.

Hans Andersen, spokesperson for employment with the governing Liberal party, which Poulsen also represents, admitted that the administrative task for unemployment service providers would likely become “a bit more difficult”.

“I am not concerned that, if you have the right to unemployment insurance benefits, you will get them, provided you can document this. But I agree there will be an extra administrative task,” he said to Politiken.

Should the Social Democrats decide to oppose the planned law change, the government would nevertheless retain a majority in favour, given that the anti-immigration Danish People’s Party, a parliamentary ally, remains in support.

That party’s spokesperson on the issue, Bent Bøgsted, told Politiken that “(a-kasse) members are (also) responsible for documenting their employment history”.

READ ALSO: The Local's introductory guide to parental leave in Denmark

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