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COST OF LIVING

Denmark announces new winter aid package for households

A majority in the Danish parliament has agreed on a new package of cost-saving measures for homes this winter, including sunk electricity taxes and increased family welfare.

Denmark announces new winter aid package for households
Danish politicians gather at the Ministry of Finance on Friday September 23rd to announce a cross-aisle winter support package for homes and businesses. Photo: Mads Claus Rasmussen/Ritzau Scanpix

In addition to pushing electricity tax close to zero and raising the existing standard welfare payment for families, a provision to delay payment of excess energy bills has also been approved.

As previously proposed by the government, the deal will allow energy bills exceeding 2021 prices to be paid at a delayed time and in instalments. The additional cost of the bill, not the entire bill, will be eligible for delayed payment. The option will be available to both businesses and individuals.

Parliament has agreed the new measures to provide additional help to people, particularly families, who are struggling with energy costs. The deal was scheduled to be presented at the Ministry of Finance on Friday. 

Some of the measures won’t kick in until the new year, however.

A core component of the package includes lowering the electricity tax from 69.7 øre per kilowatt-hour to 0.8 øre – equivalent to the minimum rate permitted by the EU – for the first six months of 2023. An øre, literally translating to ‘ear,’ is a kroner-cent. 

This measure alone is estimated to cost the Danish state 3.5 billion kroner.

Additionally, the family benefit sent to families in January 2023 will be temporarily increased by 660 kroner per child. 

The benefit, which has the official name børne- og ungeydelse but is also commonly called the børnecheck (“child cheque”), is paid out quarterly to all families. It normally ranges from 966 kroner to 4,653 kroner per quarter, depending on the age of the child.

More money will also be set aside to help expand district heating and substitute gas boilers with more efficient forms of heating, broadcaster DR reported.

The total cost of the package to the government is around five billion kroner.

“To give Danish households more security, the government has reached a broad agreement on a delayed [energy] payment scheme, a lower electricity tax and increased child cheque,” Finance Minister Nicolai Wammen said in a press statement.

“With this agreement, all Danish households and businesses get a helping hand. The agreement doesn’t solve all problems but can give more security over the winter,” he said.

Parties on both the right and left wings have agreed to vote through the deal. These are the Liberals (Venstre), Socialist People’s Party (SF), Social Liberals (Radikale Venstre), Red Green Alliance (Enhedslisten), Conservatives, Denmark Democrats, Alternative and Moderates, along with the governing Social Democrats.

The deal could be officially adopted by parliament as early as next week, DR reports.

As a result of supply stoppages for Russian gas, on top of inflation, energy prices in Denmark are at record levels, with high costs set to persist throughout the winter.

READ ALSO: How much will Danish energy bills go up this winter?

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ENERGY

How to apply for Denmark’s 6,000 kroner energy relief if you were missed by automatic payments

Denmark last year sent an automatic 6,000-kroner payout to eligible households in a measure intended to relieve people struggling with high energy costs. People who think they may qualify for the money, but didn’t receive it, can soon apply.

How to apply for Denmark’s 6,000 kroner energy relief if you were missed by automatic payments

The tax-free cash payout of 6,000 kroner was approved by parliament last spring in response to rising energy prices and sent out in August to households which met the set criteria.

The payments were made automatically, so no application was needed at the time.

Households with a collective pre-tax income of under 706,000 kroner were eligible for the one-off cash boosts. Additionally, the household should be primarily heated by individual gas heaters (or have experienced similar increases to bills as such homes) or be located in a district heating area in which the heating is produced by at least 65 percent gas.

But errors in registration data could result in households which meet the criteria not receiving payments automatically, the Danish Energy Agency said at the time.

People who believe that their household meets the criteria, but have not received the money, can therefore apply for it from early 2023.

A significant number of people also received the money even though they did not fulfil the criteria, for example because they had replaced their gas boilers but the registration data on their homes was outdated.

READ ALSO: Up to 70 Danes offer to pay energy money back to government

An additional application round for the heating cheques opens on March 14th, according to a notice from Energy Minister Lars Aagaard to parliament’s energy committee.

“The vast majority of households which are entitled to the heating cheque have received the payment. Some households, which are entitled according to the law have meanwhile seen circumstances which mean they unfortunately didn’t receive the cheque automatically,” he wrote.

Specifically, the Danish Energy Agency (Energistyrelsen) will open a digital application platform via the website varmecheck.dk.

If your household did not receive the payout last year, you can apply for it if the household’s overall income in 2020 was less than 650,000 kroner (after the AM-bidrag tax contribution is deducted).

Application must be made within an eight-week window. You can enter your email address on the varmecheck website to receive a reminder when the application round opens.

“Reasons that households have not received the cheque automatically could for example be that there was data missing or not sufficiently ready for an automatic payment to happen, [or] that the oldest person in the household didn’t have a Nemkonto [designated bank account, ed.] for the money to be paid into,” Aagaard wrote in the parliamentary note.

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