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Government changes Danish residency requirement for unemployment insurance

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Government changes Danish residency requirement for unemployment insurance
Minister of Employment Troels Lund Poulsen. Photo: Mads Claus Rasmussen/Ritzau Scanpix
13:36 CET+01:00
The government and parliamentary ally the Danish People’s Party (DF) have changed a proposed new residency requirement for unemployment insurance cover, the Ministry of Employment announced on Thursday.

Under the proposal, residency in Denmark or another EU or EEA country for seven of the last 12 years will be required in order to be eligible for unemployment benefits, dagpenge in Danish.

“Procedure of this bill has shown that there is a need for people to be able to work abroad for longer than one year without losing eligibility for unemployment cover. We have listened to that,” Minister of Employment Troels Lund Poulsen and DF employment spokesperson Bent Bøgsted said in a joint press statement released on Thursday.

The adjusted rule would mean that “Danes who have worked abroad for shorter periods will not be affected, while people from third countries must still work and reside in Denmark for a long time before they are entitled to unemployment benefits. That was the intention all along,” it continued.

The bill providing for the new requirement is currently awaiting the second of the three procedural parliamentary hearings on December 18th. After the third hearing, it can be passed into law and has been scheduled to come into effect from January 1st.

The originally-proposed rule change would have required members of service providers, A-kasser, to document residence in Denmark or another EU or EEA country for seven of the last eight years in order to be eligible for payouts if they become unemployed.

Critics of the plan have noted its potential impact on both Danes and foreign citizens who risk losing insurance cover after working abroad, despite paying fully into the A-kasse system for many years, while industry representatives have said that requiring proof of residence could result in administrative backlogs.

The opposition Social Democrat party, initially a backer of the plan, withdrew its support earlier this month, calling the proposal "not thoroughly prepared".

Pushback against the stringent new requirement appears to have resulted in the milder form now proposed by the government.

Over 80 percent of people who could lose eligibility under the new version of the requirement are non-EU or EEA citizens, according to the ministry’s press release. The proportion under the previous form was 60 percent, the statement said.

In a written response to a parliamentary question, Poulsen earlier confirmed that the stricter residency requirement was expected to affect 10,900 people on January 1st, according to a report by news agency Ritzau.

Of these 10,900 people who would lose eligibility for unemployment benefits, 100 are currently out of work and would therefore see their income significantly reduced as they are switched to a more basic form of social welfare.

It is not clear how those numbers are changed by the new version of the rule.

The new requirements are to take partial effect on January 1st next year and be fully phased in by 2021.

That means residency requirements of five years of the last 12 in 2019, six of the last 12 years in in 2020 and the full seven-year requirement in 2021, under the adjusted bill announced on Thursday.

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

READ ALSO: Unemployment insurance applicants in Denmark must provide proof of foreign address under new rules

 
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