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ANALYSIS: How could Denmark’s 2022 budget affect foreign residents?

Denmark’s government has finalised the national budget for 2022. We look at elements of the deal most likely to affect foreign residents of the country.

We've reviewed Denmark's 2022 budget text and picked out elements of the deal which could affect foreign residents of the country.
We've reviewed Denmark's 2022 budget text and picked out elements of the deal which could affect foreign residents of the country. Photo: Kristian Djurhuus/Ritzau Scanpix

Free dental care for 18-21 year-olds and smaller class sizes for young children are among notable changes in the budget.

Spending on the health service and changes to some tax subsidies rules contain elements which foreign residents may also want to take note of.

READ ALSO: Denmark finalises 2022 budget agreement

“When Denmark was hit by the corona crisis, the government did not hesitate to pump millions of kroner into the economy to provide security for Danish wage earners and companies. The Danish economy is now back in incredibly good form and a tighter budget is needed. I’m therefore satisfied that we’ve agreed a responsible and balanced budget for 2022,” finance minister Nicolai Wammen said in a ministry statement.

The full text of the budget agreement can be read (in Danish) on the Ministry of Finance website.


In the budget announcement, the government says that the parties behind the finance deal “agree to prioritise core welfare, including by improving conditions for children and young people, introducing free dental care for young people aged 18-21 and by ensuring funding for a dignified elderly care”.

Although details of how it will work are so far unspecified, dental care under the national health system would mean that foreigners who legally reside in Denmark and fall into the eligible age bracket could possibly qualify. This may be of relevance to groups such as international students.

Spending on free dental care for young people will be 100 million kroner in 2022, rising incrementally each year to 410 million kroner in 2025.

Maternity care

A shortage of both midwives and capacity on maternity wards has long been cited as a major challenge across Denmark’s five healthcare regions.

Spending of 100 million kroner next year, rising to 150 million kroner annually by 2025, is allocated to this.

In an agreement on a health care spending, released on Sunday ahead of the main budget announcement, the parties behind the deal stated an aim of allowing all mothers to stay in hospital for two days after giving birth.

Many new mothers in Denmark are currently discharged from hospitals within hours of their babies being born.

The implementation of the funding is to be determined following talks between the parties, the government states in the budget.

But spending will be aimed at “establishing rights for pregnant women and ensuring more midwives,” it says.

New standards, normeringer in Danish, will be considered under the auspices of the Danish Health Authority.

Spending on hate crime prevention

“More must be done to prevent hate crimes”, the government says in the budget.

8.2 million kroner in 2022 and 8.1 million kroner from 2023-25 are allocated to the area in the new finance deal.

This money can be invested in “educational material and increased documentation” and its implementation will involve the justice ministry.

READ ALSO: Denmark sees rise in hate crime as government plans law change

Funds to speed up processing times for foreign medics

Significant extra funding is to be given to the health service.

The budget provides for a billion kroner for additional spending in extraordinary circumstances, and will be used to retain health sector staff and boost hospital capacity.

The money is to be distributed to the regional authorities who can decide how to spend it in consultation with staff organisations.

The 2022 finance dealIt also earmarks spending to reduce processing times for authorisation of foreign health professionals, an area which is currently subject to severe delays.

This provides some cause for optimism for foreign medical professionals who are waiting for their authorisations to come through. Many have been doing so for well over a year.


Tax break for home improvements ends

A tax deduction for home improvements, the “håndværkerfradrag”, is to be scrapped in 2022.

The tax deduction will be removed from April 1st next year. Other tax deductions that can be applied for home services, including cleaning and childcare, are retained.

Tax subsidies for people who hire services in their homes, termed boligjobordningen, were broadened last year as part of government measures to support the economy during the coronavirus crisis.

But the home improvement element of this scheme will now come to an end. Parties behind the budget said it was longer needed as a stimulus for the sector.

The provision allowed for a higher tax deduction for the encompassed home services.

READ ALSO: Denmark scraps popular tax deduction for home improvements

Green taxes

Additional climate taxes in the form of a green tax reform are briefly mentioned in the budget.

Such reforms are a “key element in meeting climate goals, including with a unified CO2 emissions tax,” the budget text states.

The budget obliges the government to initiate talks on the area in early 2022, based on the first part of an expert group report.

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Danish government returns debt payments from 138,000 people 

Around 138,000 people in Denmark have been unable to repay debts to the Danish state in 2022 after money they paid was refunded.

Danish government returns debt payments from 138,000 people 

From January to October 2022, 138,000 people in Denmark trying to square their debts with the government were refused due to confusion about whether the Danish Debt Collection Agency (Gældsstyrelsen) actually has the right to receive it, newspaper Berlingske reports.

Having a debt to the Danish public sector on your books can have serious financial consequences, including jeopardizing your eligibility to secure a mortgage.

Data from the Debt Collection Agency indicate the number of debts considered “not ready for recovery” has increased by 1.5 million this year. Half of those debts are connected to the Danish Tax Authority (Skattestyrelsen). 

In total, the 138,000 people were refunded 121 million kroner, including 17 million kroner in unpaid interest. That works out at an average refund of 750 kroner per person.

Based on the scale of the problem, the government will have to consider cancelling some of the debts, Peter Bjerre Mortensen, professor of public administration at Aarhus University, tells Berlingske. 

“They need to swallow some very big camels and/or simplify some legislation or forgive some debts, because right now it seems that things are still going the wrong way with regard to collecting public debt,” Mortensen said. 

The issues with ‘unpayable’ debts first arose in 2015 when EFI, the IT system Skat used to collect debt, was shuttered, according to Berlingske.

Debts to the Danish state have been growing since then. The parliamentary ombudsman said earlier this week that he would try to find out why individuals have been unable to repay debts.

“The ombudsman has received complaints from several members of the public and there have been articles in the media about people who could not repay their debt to the state,” wrote the ombudsman, Niels Fenger.

Tax minister Jeppe Bruus has previously recognised the issue with the repayment system.

“This is a huge challenge and something that must be worked on and improved,” he told newspaper Jyllands-Posten in September.

READ MORE: ‘Topskat’: What is Denmark’s high income tax bracket?