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May 21st, 2013

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The government teamed up with far-left party Enhedslisten (EL) yesterday to agree upon a new unemployment benefit (dagpenge) plan that is expected to prevent thousands of people from losing their unemployment benefit rights.

Among other things, the dagpenge agreement will extend the current education initiative (uddannelsesordningen) until the end of this year and will incorporate a new labour market benefit similar to kontanthjælp, running from 2014 to 2017.

The finance minister, Bjarne Corydon (Socialdemokraterne), is pleased to have come to terms with an agreement that will offer security for many families.

“The agreement will correct the brutal phasing-in of the dagpenge reform that the previous government implemented despite the country being mired in a deep financial crisis,” Corydon said in a ministerial press release. “I am happy that we will now create security for the many families who have found themselves stuck between a rock and a hard place.”

EL, which campaigned long and hard for those who would fall out of the dagpenge system, expressed relief that the dagpenge package is finally in place but warned that the battle is far from over.

“I am very relieved that we’ve managed to agree on this dagpenge plan, because we secure the thousands of unemployed who were on the brink of losing their support thanks to the previous government,” Johanne Schmidt-Nielsen, EL’s political spokesperson, said in a press release. “But this agreement merely puts out a fire. We are still left with poor dagpenge rules and if the government thinks that this agreement ends the issues, then they have another thing coming.”

The new dagpenge agreement will run to the end of 2016 and will cost around two billion kroner, funds that will be found from a number of sources, but not via the unemployment insurer funds (a-kasser) as had previously been proposed.

“Instead, we have gathered funds that stem from such areas as the Finance Ministry’s reserves, fund pools from the employment arena and changes to the Danish language education system, which we find acceptable,” Schmidt-Nielsen said.

About 600 million kroner will be obtained from restructuring the Danish language education courses for foreigners. Foreigners who come to Denmark to work will only be entitled to one year of Danish courses instead of the three years they get today. At the same time, immigrants who are in Denmark due to family reunification will have the right to have five years of Danish courses. Another 270 million kroner will be found by cutting separate cultural education courses for foreigners and folding that into the language education.

But despite the widespread political approval, there are still those who warn that the new agreement will only serve to further isolate the people already on dagpenge.

“The truth is that the longer they are on dagpenge, the greater the risk of permanently ending outside the labour market,” Stine Pilegaard Jespersen, the deputy chief executive from business advocates Dansk Erhverv, said in a press release. “The people who have exhausted their dagpenge rights have already been unemployed for a long time and it does not help them or society to further extend their benefit period.”

Factfile | Main points of the new dagpenge agreement

• The education initiative (uddannelsesordning) is extended, meaning that people who exhaust their right to dagpenge or the right to the uddannelsesordning in the second half of 2013, are granted the right to the uddannelsesordning for up to another six months.
• As of 1 January 2014, there will be a new temporary labour market benefit (arbejdsmarkedsydelse) that will make up 60 percent of the maximum dagpenge amount for non-providers and 80 percent for providers. The new benefit will not be dependant on spousal income or family fortune and will be given to people who have exhausted their dagpenge/ and/or uddannelsesordning rights after January 1, 2014.
• Individuals who exhaust their dagpenge rights during the first half of 2014 have a right to the arbejdsmarkedsydelse for up to 15 months
• All temporary arbejdsmarkedsydelse receivers must be placed in the job-geared initiative (virksomhedsrettet indsats) latest one month after going on benefits. The initiative must have a duration of at least 13 weeks at 20 hours per week. It will encompass private wage subsidies (privat løntilskud), public wage subsidies (offentligt løntilskud), company internship programmes, community service jobs (nyttejob) and job rotation.
• Unskilled and skilled unemployed workers with obsolete educations will have the right to an 8-week course that they can arrange with their local job centre.