Danish municipalities use 1 percent of special fund for struggling homes

A state assistance fund of 100 million kroner through which municipalities can help hard-up residents pay bills has been scarcely used.

Danish municipalities use 1 percent of special fund for struggling homes
A government fund through which municipalities can help struggling residents pay energy bills has been used scarcely. Photo: Ida Marie Odgaard/Ritzau Scanpix

A government fund of 100 million kroner intended to allow municipalities to help low-income people in Denmark pay expensive energy bills and avoid using food and clothes banks has been rarely used because of a combination of tight eligibility criteria and flimsy messaging, broadcaster DR reports.

Its aim is to help people to pay electricity and heating bills by applying for extra financial assistance through their municipalities, which can grant it based on set criteria. The funding for the scheme comes from the state.

Social care minister Astrid Krag last week told DR that the pool is to be increased from 100 million to 200 million kroner.

Documentation required includes the specific bill the applicant wants to pay, along with proof of their regular expenses and value of high-cost possessions such as cars.

While all of Denmark’s 98 municipalities can distribute money from the fund, only 22 local authorities have so far attempted to use it, applying for a total of 1.1 million of the 100 million available kroner as of Tuesday, according to documentation provided to broadcaster DR.

Major city governments Copenhagen, Aarhus and Odense have not applied for any of the funds.

Employment minister Peter Hummelgaard criticised municipalities for being too slow to make use of the provision, telling DR the money needs to be handed out by local authorities to make a difference to finances in private homes.

“It’s sloppy that municipalities have not used this money. I have on several occasions written to KL [national organisation for municipalities, ed.] and made them aware of the 100 million kroner that can help individuals that need help. We must make sure this money gets out and does its work,” he said.

The national organisation for municipalities, Kommunernes Landsforening (KL), said local authorities are aware the fund exists.

“It’s our impression that work is being done in municipalities, but also that many of the residents that apply are rejected because they don’t meet very strict criteria,” KL senior economist and director Morten Mandø told DR in a written comment.

One of the criteria for receiving financial assistance from the fund is that the applicant must not have savings of more than 10,000 kroner, he noted.

Hummelgaard said he was prepared to change the rules.

“If there’s a problem with the legislation, then it must be changed and this must be done quickly. We’d be glad to look at the criteria for granting help,” he said.

Professor in social rights Nina Von Hielmcrone of Aalborg University told DR the scheme is not broadly known of.

“Awareness is extremely low since the fund has not been used. The conditions are strict, you must meet a lot of criteria. But there’s a lack of applicants. There’s a lack of knowledge,” she said.

The application process itself may be part of the problem  because underprivileged people in some cases may find it difficult to get help supplying documentation and submitting digital applications, she also said.

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Cheaper electricity on the way for 2.5 million Danish customers

Electricity customers in eastern parts of Denmark will soon see their bills reduced after energy grid operators agreed to reduce their tariffs from March 1st.

Cheaper electricity on the way for 2.5 million Danish customers

Two energy grid companies, Cerius and Radius Elnet, are to reduce their tariffs from March 1st. The two companies operate on Zealand and the smaller islands Lolland, Falster and Møn.

Tariffs were increased at the turn of the year because the companies said they had a backlog of additional costs from last year that they wished to trim.

Money raised from tariffs goes toward the cost of maintaining the electric grid and transporting energy to consumers.

An electricity bill accounts for tariffs, the raw electricity price, VAT and other taxes.

The average tariff for customers in Radius’s area — Copenhagen, North Zealand and parts of Central Zealand — should drop by 18 percent from March, while the rest of Zealand will see their tariffs fall an average of 20 percent. 

READ ALSO: Danish regulator says  electricity companies earn ‘excessive’ profits

“It was very sad in the autumn when we had to announce price increases but with the sudden high increases to the cost of electricity, there was no way around it,” head of operations Cäthe Juul Bay-Smidt of Cerius and Radius Elnet said.

“But as we clearly said at the time, and as we have said since, we intended to reduce prices again as soon as we saw a longer-term trend towards lower prices. That’s what we’re seeing now,” she said.

“And that means we will have lower costs and then we can put our prices down,” she said.

As many as 2.5 million customers on Zealand, Lolland, Falster, Møn and outlying smaller islands could feel the benefit of the lower tariffs.

A third energy grid company, Trefor, is also reported to be considering reducing tariffs. Trefor operates in the trekantsområde or “triangle region” encompassing areas in and around the towns of Vejle, Kolding and Fredericia.

No final decision has been taken by Trefor so far.

“We have considerations about hopefully being able to reduce prices around the time of the summer holiday. I don’t expect to be able to do it earlier,” director of infrastructure Charles Nielsen told news wire Ritzau.

“That is because we have a relatively large debt from last year and previous years that must be cut back,” he said.