The new law means that residency in Denmark or another EU or EEA country in seven of the last 12 years will be required for eligibility through the A-kasse unemployment insurance system.
Payouts to A-kasse members, known in Danish as dagpenge, are funded in part by the state and in part by membership fees.
A narrow majority consisting of the government and parliamentary ally the Danish People’s Party (DF) voted in favour as procedure of the bill was completed on Thursday.
The residency demand is part of a plan to finance tax cuts announced earlier this year, while DF has stated it wants to reduce access to the social welfare mechanism for foreign citizens.
The requirement will affect both Danish and foreign citizens that have lived outside of the EU or EEA during the period defined by the rule.
“Many members who have paid (their fees) for years will be punished for travelling out into the world to gain knowledge and skills,” Torben Poulsen, chairman of industry representative group Danske A-Kasser, said recently to Ritzau.
A number of exceptions will apply to the rule, including for people who have worked on Danish ships, have been given placements abroad with Danish authorities or have been hired by Danish companies to work abroad.
“I am very concerned about how many people this will actually affect and how many will lose their right to unemployment insurance,” Social Democrat employment spokesperson Leif Lahn Jensen said during parliamentary debate of the bill, Ritzau writes.
Jensen’s party initially supported the bill but later changed its position after concerns were voiced over the potential impact on Danes who have worked abroad. The Social Democrats generally oppose opening access to the Danish labour market for foreign citizens.
The party, the largest in opposition, has said it would roll back the law change if it comes into government after the next general election, set for no later than June next year. The party supports a residency requirement for the form of social welfare, but has not specified how it would replace the new law.
Employment minister Troels Lund Poulsen said potential issues arising from the rule would “be resolved”.
“I am not saying there won’t be difficulties with this proposal. But we will make sure they are resolved,” he said to Ritzau.
The new requirements are to take partial effect on January 1st and be fully phased in by 2021.
That means residency requirements will be 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.