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July 3rd, 2012

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In an effort to generate more public funds, the government teamed up with the opposition on Saturday and agreed to a reform of programmes to support those incapable of holding a full-time job.

The reform, which frees up an estimated 1.9 billion kroner and comes into effect in 2013, diverts finances from the flex job programme and early age pension schemes to fund education and research.

The deal comes on the heels of the dramatic tax agreement the government struck with the opposition a week ago. After enraging the left-wing Enhedslisten by leaving it out of the tax deal, the government further alienated the party by not including it in the labour market reform. But the employment minister, Mette Frederiksen (Socialdemokraterne), maintained it was necessary to reach out to the opposition.

“It’s important for parliament and the government that we co-operate with as many parties as possible to make the changes that will make the economy more sustainable,” Frederiksen told Børsen newspaper. “Six out of eight parties in parliament signed the labour market deal, which means it is widely approved and these kinds of reforms should be.”

KL, the national association of local governments, said it too was pleased with the new reform and that the new rules were already being put into effect.

“It’s a good reform that can help move people from passive support to work, which is good for the country and the individual,” Erik Nielsen, KL’s president, wrote on the organisation's website. “A loss of the ability to work is not necessarily a permanent condition and that’s why it’s completely wrong to grant permanent support to young people.”

But the reform move has attracted its fair share of critics, who contend that it only serves to further marginalise certain groups.

“The flex job programme is a success because many ill people have used it to maintain a normal connection to the labour market,”  Mette Kindberg, vice president of HK, a union representing office workers and retail employees, told Berlingske newspaper. “People in flex jobs contribute as tax payers and it’s unfair to target them.”

Enhedslistenattacked the most recent reform, calling it “a raw and dirty savings manoeuvre” in a press release.

“Now they’re kicking the sick and handicapped again. People who are scraping by and are at massive personal expense trying to fit into society and the labour market,” Finn Sørensen, an Enhedslisten spokesperson, said. “The government is taking the rights of these groups away now.”

Last year there were about 61,000 people in the flex job scheme while there were 262,000 early age pensioners. Together, the two programmes cost 40 billion kroner a year.

According to the Employment Ministry, people who are already in a flex job will not be affected, and people on early age pension will also not be affected, unless they change or lose their jobs. 

Factfile | Early age pension reform

People under 40 will not be granted early age pension, unless they are declared unfit to work. Instead they will be given individually based counselling

In 2020, 1.2 billion kroner a year will be set aside for counselling and rehabilitation programmes. That amount is set to increase to 1.4 billion further in the years to come

Local governments must establish rehabilitation teams that will co-ordinate the efforts

Factfile | Flex job reform

The flex job agreement is organised so that people with a very limited ability to work can benefit from the agreement in the future

The biggest subsidy will no longer be given to flex job employees with the highest wages, but to the flex job employees with the lowest wages and the least ability to work