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In numbers: Increasing inflation makes life in Denmark more expensive

Inflation in Denmark is at its highest level for years, making the cost of living in Denmark more expensive.

Goods at a Danish supermarket checkout. Inflation is pushing up the cost of living for consumers.
Goods at a Danish supermarket checkout. Inflation is pushing up the cost of living for consumers. Photo: Signe Goldmann/Ritzau Scanpix

An increase in inflation in September, to 2.4 percent from 1.8 percent the previous month, has impacted already-high living costs.

New data from Statistics Denmark, released Monday, shows the growing rate of inflation in recent months up to September.

The driving force behind inflation is rising energy prices, but inflation occurred even when higher energy prices are not included in the calculation.

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Core inflation, which does not take into account energy and unprocessed food prices, moved from 0.9 percent to 1.4 percent in September.

The inflation trend in Denmark is in keeping with that seen across Europe. Inflation on the continent is even higher than that recorded in Denmark and increased from 3.2 percent in August to 3.6 percent in September. The core inflation here rose from 1.9 percent to 2,2 percent.

In addition to fuel, the cost and maintenance of transport is also pulling inflation and prices up in Europe, according to the statistics agency.

According to the agency’s analysis, the product group which most contributed to inflation in Denmark between the months of August and September was electricity, gas and other fuels. The product group that contributed the least growth was package holidays. These are consistent with the highest and least contributing groups for both the EU 27 countries and for the euro zone countries.

Inflation is defined by the agency as the change to the Harmonised Index of Consumer Prices (HICP) over the last year. Core inflation is normally used as a longer-term indicator for price changes.

Earlier this month, Statistics Denmark also reported that electricity prices were pulling consumer prices up.

September 2021 saw the overall consumer price index for Denmark at 2.2 percent higher compared to the equivalent month in 2020. That was the largest change across a 12-month period since 2012.

The 2.2 percent price inflation figure takes into account a 2.9 percent increase in the price of goods and 1.6 percent increase in the price of services.´

Price changes within the category ‘home use, electricity and heating’ (boligbenyttelse, elektricitet og opvarmning), particularly the cost of electricity, were the biggest factors in the annual increase.

Electricity increased by 15.2 percent in price between September 2020 and September 2021, the biggest hike since December 2008, during the Global Financial Crisis. Gas prices shot up even more over the year at 52.8 percent, the most since 1980.

Core inflation of consumer prices – without energy costs – increased by 1.3 percent in September. That compares to a 1.0 increase the month before.

READ ALSO: Why are electricity prices increasing in Denmark?

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MONEY

Boligstøtte: Who can claim Denmark’s national rent subsidy?

Residents of Denmark can in some cases apply for ‘boligstøtte’ (“housing support”), a reduction on their monthly rent.

Boligstøtte: Who can claim Denmark's national rent subsidy?

What is boligstøtte? 

Boligstøtte is a tax-free sum which people who live in rented housing can – in some cases – qualify for. It provides a subsidy to rent.

The subsidy is available to anyone who rents their home, provided the home meets certain criteria and the household income is under a certain level.

For example, your rental home must have its own kitchen (which would rule out student housing with shared kitchens, termed kollegier in Danish) and you must live permanently in the property.

Homeowners can also be entitled to apply for boligstøtte under certain circumstances. In such cases, the boligstøtte is a loan and not a subsidy, however.

The size of the subsidy – the amount of money you receive each month – depends on the overall income of the household (the total of the incomes of all wage earners at the address), the number of children and adults who live at the address, the amount of rent and the size of the house or apartment.

Boligstøtte is paid out on the first working day of each month.

How do I know if I’m entitled to boligstøtte?

Most people can apply for boligstøtte if they live in rented housing. There are a few living situations that can disqualify you, such as if you live with the owner of the property (including as a tenant) or if you own the property yourself and rent part of it.

You can, however, apply for the subsidy if you live in a property owned by your parents and pay rent to them (known as a forældrekøb – “parent purchase” – in Danish).

You can also apply for boligstøtte if you are sub-letting your house or flat, although the person sub-letting to you might have to change their address in order to avoid their income being taken into account in your application.

People who own their homes can receive bolistøtte (as a subsidy, not as a loan as detailed above) if they receive the state pension folkepension, or disability pension, førtidspension.

How and where do I apply?

You can submit an application via the borger.dk website at this link. The application platform will ask you to submit a rental contract and other documentation for your claim to be processed.

If you’re applying after moving to a new address, you must have registered your change of address with the national personal registry prior to applying. This can be done here. If you apply within 30 days of moving, the subsidy will be effective from the date you moved in. Otherwise, it will count from the first day of the following month from when you submit your application.

The processing time for the application can be up to seven weeks. You’ll receive a confirmation of your application via your Digital Mail inbox, and you will also receive notification here once the application has been processed.

By how much can I reduce my rent?

This depends on the various factors on which your eligibility is calculated – for some, you will not qualify to receive any subsidy at all.

There are five criteria upon which your eligibility – and the amount you receive – is calculated. They are the income of the household; the savings or fortune of people in the household; number of children and adults living at the address; size of the home (in square metres) and amount of rent paid.

You will receive more money if you have more children. For example, people who live in rented homes and are not receiving the state pension can get up to 1,039 kroner per month if they have no children; up to 3,654 kroner per month if they have 1-3 children; and up to 4,568 kroner per month if they have 4 children or more.

The borger.dk website has a tool on which you can estimate your boligstøtte here.

Source: borger.dk

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