Denmark to scrap residency requirement for unemployment insurance

Employment minister Peter Hummelgaard has confirmed plans to revoke legislation which restricted some foreign citizens' access to the A-kasse unemployment insurance system through rules on length of residency.

Denmark to scrap residency requirement for unemployment insurance
File photo: NIels Ahlmann Olesen/Ritzau Scanpix

Introduced by the previous government at the end of last year, the so-called residency requirement (opholdskrav) means that residency in Denmark or another EU or EEA country in 7 of the last 12 years is required for eligibility for unemployment cover through the A-kasse system.

READ ALSO: Denmark passes bill to tighten residency requirement for unemployment insurance

As such, many internationals and Danes who have lived abroad lost the right to have their income covered by the system in the event of losing their jobs.

Payouts to A-kasse members, known in Danish as dagpenge, are funded in part by the state and in part by membership fees. Membership is obtained by paying a monthly fee to a provider, known in Denmark as an A-kasse.

In an interview with newspaper Politiken on Sunday, Hummelgaard, of the Social Democratic party, said that the residency requirement would be scrapped.

“That is our policy, and it is going to happen,” the minister said.

Hummelgaard did not give a timeline for the legislation change but said it was “high” on his list of upcoming tasks.

“The vast majority of people netted by this are ethnic Danes who have worked abroad. So it does not fulfil the intention of those who passed the legislation,” Hummelgaard said.

He also added the residency requirement was “impossible to enforce”.

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

“A third problem – and it’s a huge problem – is that it has undermined the incentive to join an A-kasse,” Hummelgaard said.

The requirement for 7 years’ residence in the last 12 applies regardless of how many years an individual has been a fee-paying member of one of the service providers.

The new rules came into effect at the beginning of this year.

It was voted through parliament by the previous centre-right coalition government and right-wing Danish People’s Party, with the stated aim of curbing access to the system for people who have moved to Denmark in recent years.

The new rules – according to the 2018 bill – are to be phased in gradually by 2021, meaning residency requirements are 5 years of the last 12 in 2019, before increasing to 6 of the last 12 years in in 2020 and the full 7-year requirement in 2021.

“(The residency requirement) is unfair, unnecessary and bureaucratic,” Verner Sand Kirk, director of Danske A-kasser, an industry representative body, told Ritzau on Monday.

READ ALSO: What you need to know before signing up with Danish unions and unemployment insurance (A-kasse)

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Labour shortage hits half of Danish companies in construction sector

A record-high shortage of labour at some Danish companies is exacerbated in some places by a lack of materials, according to new data.

A file photo of construction in Aalborg. As many of half of construction companies in Denmark currently report a lack of labour.
A file photo of construction in Aalborg. As many of half of construction companies in Denmark currently report a lack of labour. Photo: Henning Bagger/Ritzau Scanpix

The construction industry reports a lack of labour at around half of all companies, according to a survey by Statistics Denmark, based on responses from businesses.

In the service industry, which includes restaurants, hotels and cleaning, one in three companies reported a lack of workforce.

Some industries, notable machinery related businesses, also said they are short of materials currently.

The lack of labour is holding the Danish economy back, according to an analyst.

“Never before have we seen such a comprehensive lack of labour in the Danish economy,” senior economist Søren Kristensen of Sydbank said.

“It’s a shame and it’s a genuine problem for a significant number of the businesses which at the moment are losing revenue as a consequence of the lack of labour,” Kristensen continued.

“That is costly, including for all of Denmark’s economic growth. Even though we on one side can be pleased that it’s going well for the Danish economy, we can also regret that it could have been even better,” the economist said in a comment to news wire Ritzau.

Despite the lack of labour, businesses have their most positive outlook for years, according to Statistics Denmark.

The data agency based its conclusions on a large volume of responses from companies related to revenues, orders and expectations for the future.

The numbers are processed into a measure termer business confidence or erhvervstillid in Danish. The October score for the metric is 118.7, the highest since 2010, although there are differences between sectors.

READ ALSO: Are international workers the answer to Denmark’s labour shortage?