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Denmark to keep unemployment insurance money paid by people who lose eligibility under new rules

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Denmark to keep unemployment insurance money paid by people who lose eligibility under new rules
File photo: Thomas Lekfeldt/Ritzau Scanpix
12:17 CET+01:00
Members of Denmark’s ‘a-kasse’ unemployment system will not be refunded contributions by the state if they lose eligibility for cover under new rules set to be phased in from January 1st.

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

Payouts to a-kasse members are funded in part by the state and in part by membership fees.

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.

The new requirements are 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 be residence in Denmark or the EU for five of the last eight years.

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

A-kasse members who will lose eligibility on January 1st, 2019 have paid 600,000 kroner in membership contributions to the state, Minister of Employment Troels Lund Poulsen stated in response to a parliamentary written question, Ritzau reports.

Of membership fees paid by all a-kasse members, 344 kroner monthly is paid to the state, which in turn is responsible for making payments to jobseekers.

According to current plans, this money will be lost for good for people whose eligibility lapses due to having resided abroad.

Finn Sørensen, employment spokesperson with left-wing party Red Green Alliance, criticised the potential loss as unfair.

“It is awfully unfair that the state just gets to score that money. The absolute least you can do is to prevent harming to these people who have paid for membership for years, in the belief they would actually be able to use it if they needed to,” Sørensen told Politiken.

The anti-immigration Danish People’s Party (DF) has agreed with the government over the new residency requirement. The party’s employment spokesperson Bent Bøgsted said he was open to the suggestion of state refunds to those losing cover after January 1st.

“That seems reasonable enough. It’s a suggestion we could look closer at whether it would be possible,” Bøgsted said to Politiken.

The bill providing for the new rule is expected to be passed by a parliamentary majority following the last of three procedural hearings on December 13th.

Politiken reported on Wednesday afternoon that the opposition Social Democrat party, a hitherto backer of the bill, was withdrawing its support. The party's employment spokesperson Leif Lahn Jensen called the proposal "not thoroughly prepared" and called for Poulsen to withdraw it and prepare a new one. The Social Democrats remain in favour of stricter residency requirements for the unemployment insurance in general.

But the government and DF can pass the bill with or without Social Democrat votes.

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