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Denmark has record-low number of unemployment benefits claimants

Fewer people than previously recorded are currently in receipt of the basic form of Danish unemployment benefits.

Denmark has record-low number of unemployment benefits claimants
Denmark is currently seeing record numbers of job vacancies combined with low unemployment. Photo: Ida Guldbæk Arentsen/Ritzau Scanpix

The number of people who receive kontanthjælp, the basic form of unemployment welfare, was 103,300 in June, according to Statistics Denmark data.

That is the lowest number since records began 14 years ago.

The number includes other basic benefits given to people on work re-entry programmes as well as the lower integrationsydelse which is given instead of kontanthjælp to migrants who are in the integration system.

People not currently in employment can qualify for welfare payouts known in Danish as dagpenge, funded in part by the state and in part by membership fees, by joining an A-kasse or unemployment union.

Non-A-kasse members can apply for ‘social assistance’ or kontanthjælp, the lowest level of benefit. It is only available to those over 30 years old, who are legally resident in Denmark, and who have no other means of support.

EXPLAINED: Should I sign up with a Danish union and get unemployment insurance?

Economic Council of the Labour Movement (Arbejderbevægelsens Erhvervsråd) senior economist Erik Bjørsted said that the new numbers indicate that the strong Danish economy is bringing people in from the fringes of the labour market.

“We are currently going through a jobs boom without precent in modern times. That is opening the doors for people on the edge of the jobs market,” Bjørsted said.

“The large drop we saw in the number of people receiving social assistance from 2004-2008 was back then called the biggest social-political advance in decades. We are now repeating it,” he added.

An additional factor in the low number is the suspension of the minimum eligibility period for dagpenge during the coronavirus crisis, another commentator said.

That means people would not have been forced to switch from one form of welfare to the other because their dagpenge maximum eligibility period was used up.

As such the current level for the more basic kontanthjælp is “artificially low, according to senior economist Niklas Praefke from organisation Lederne.

“During the coronavirus crisis, the dagpenge limit was suspended, so nobody used up their right to it during that period. That has put a plug in the transition from dagpenge to kontanthjælp,” Praefke said in a written comment.

The economist also said that a high number of vacancies in Denmark gave good potential for getting available people into work.

READ ALSO: Why does Denmark have so many job vacancies? 

The number of people receiving kontanthjælp peaked at 175,200 in 2015 before consistently falling, except for a sharp peak caused by the coronavirus crisis.

Denmark’s government on earlier this week presented proposals to reform rules on certain types of social welfare including the two main forms of unemployment benefit.

READ ALSO: What do Denmark’s proposed welfare reforms mean for foreign residents?

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WORKING IN DENMARK

Feriepenge: Denmark’s vacation pay rules explained

If you work for a company in Denmark, your yearly time off is likely to be provided for by the 'feriepenge' accrual system for paid annual leave.

If you work in Denmark, a good understanding of 'feriepenge' (holiday allowance) rules will help you plan time off in the summer and around the calendar.
If you work in Denmark, a good understanding of 'feriepenge' (holiday allowance) rules will help you plan time off in the summer and around the calendar. Photo by Felipe Correia on Unsplash

One of the perks of being a full-time employee in the country, Danish holiday usually adds up to five weeks of vacation annually. There are also nine days of public holidays, which everyone benefits from.

The Danish Holiday Act (Ferieloven) provides the basis for paid holiday through accrued feriepenge (‘vacation money’ or ‘vacation allowance’). This covers most salaried employees, although some people, such as independent consultants or freelancers, are not encompassed.

What is feriepenge?

‘Holiday money’ or feriepenge is a monthly contribution paid out of your salary into a special fund, depending on how much you earn.

You can claim back the money once per year, provided you actually take holiday from work. It is earned at the rate of 2.08 vacation days per month.

If you are employed in Denmark, you will be notified when the money can be paid out (this is in May under normal circumstances) and directed to the borger.dk website, from where you claim it back from national administrator Udbetaling Danmark.

Anyone who is an employee of a company registered in Denmark and who pays Danish taxes is likely to receive holiday pay, as this means you will be covered by the Danish Holiday Act (ferieloven). You are not an employee if, for example, you are self-employed, are a board member on the company for which you work or are unemployed.

How do I save up time off using feriepenge?

The law, which covers the five standard weeks or (normally 25 days) of paid vacation, states that you are entitled to take vacation during the vacation year period. You earn paid vacation throughout a calendar year at the rate of 2.08 days per month.

You earn vacation time in the period September 1st-August 31st. You can then use your vacation in the same year that you earn it and up to December 31st the subsequent year – in other words, over a 16-month period.

These rules also mean that holiday earned during a given month can be used from the very next month, in what is referred to as concurrent holiday (samtidighedsferie).

So when can I take time off using this accrued vacation?

The Danish vacation year is further broken down so that there is a “main holiday period” which starts on May 1st and ends on September 30th. During this time, you are entitled to take three weeks’ consecutive vacation out of your five weeks.

A lot of people take three weeks in a row while others break it up – which is why you often hear Danish people who work full time wishing each other a “good summer holiday” as if it’s the end of the school term.

Outside of the main holiday period, the remaining 10 days of vacation can be taken whenever you like. You can take up to five days together but may also use the days individually.

If your employer wants to decide when you should take any of your vacation days, they have to let you know at least three months in advance for main holiday, or one month in advance for remaining holiday (barring exceptional circumstances, such as an unforeseen change to the company’s operations or if the company closes for the summer shortly after you begin employment).

If you have not earned paid vacation, you still have the right to take unpaid holiday.

Public Holidays

In addition to the vacation days, there are also public holidays. These are bunched up mostly in the early part of the year and around Christmas. However, the period between June and Christmas includes the above-mentioned main annual leave, so there’s not usually long to wait until you can take time off.

Denmark has public holidays on:’

  • New Year’s Day  
  • Maundy Thursday
  • Good Friday
  • Easter Monday  
  • Great Prayer Day (Store Bededag)
  • Ascension Day
  • Whit Monday
  • Christmas Day
  • Boxing Day

In addition to the usual public holidays, companies can choose to give extra time off, for example on Christmas Eve or New Year’s Eve. There are also differences regarding Labour Day and Constitution Day, depending on where you work, what kind of work you do, or the collective bargaining agreement under which you are employed.

Sometimes you can get a whole day off for these extra holidays, sometimes just a half day. Check with your employer for details.

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