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Denmark: Unemployment Benefits Extended

(June 5, 2013) The repeal of a January 2013 law limiting unemployment benefits to a two-year period means that Denmark’s unemployed will now be able to receive funds for four years through a two-year extension of the benefit period. The amount each unemployed person receives, however, will be reduced to only 60% of what it was during the first two years. The benefits, which are supported by a government-backed insurance fund, will be paid for with an increase of 30 kroner (about US$5.20) a month in the amount that employed workers must pay into the fund. (Denmark’s Unemployed to Get Benefits Extension, ICE NEWS (May 21, 2013); Peter Stanners, Pressure Mounting to Change Unemployment Benefit Rules, THE COPENHAGEN POST (May 8, 2013).)

Speaking about the extension, Prime Minister Helle Thorning-Schmidt stated, “[w]e have to do this because growth has been slower than expected. … The economy looks like it’ll continue to grow sluggishly. Creating jobs, and supporting those without a job has been our top priority.” (Denmark’s Unemployed to Get Benefits Extension, supra.)

The revision in the rules follows public calls for reform of the unemployment benefits system. Thorning-Schmidt had earlier rejected requests to make it easier for people to earn unemployment benefits by shortening the length of time needed to qualify for those benefits. Verner Sand Kirk of the Association of Unemployment Insurers disagreed with that decision, pointing out that at present it takes 52 weeks of employment over the latest three years for a person to qualify for benefits and that reducing that requirement to 26 weeks would help those who have only had temporary, short-term work. (Stanners, supra.)