Pressure mounting to change unemployment benefit rules

Coalition cannot agree on whether to shorten the length of time it takes to earn unemployment benefits as thousands continue to fall through the safety net

May 8th, 2013 11:59 am| by admin

The prime minister, Helle Thorning-Schmidt (Socialdemokraterne), has rejected calls to make it easier to earn unemployment benefits, dagpenge, as recommended earlier this week by some trade unions and MPs.

According to the association of unemployment insurers, AK-Samvirke, around 13,000 Danes have so far lost their benefits since the government halved the length that dagpenge can be claimed to two years – they anticipate that a total of 30,000 will fall out of the system this year.

Aware of the problem the reform would create, the government implemented an emergency jobs programme that was designed to find work for those who stood to lose their benefits. While it has been roundly condemned as a failure, the PM still refuses to budge on changing the rules to make earning the right to dagpenge easier.

“We have done everything we could to help people who risk falling out of the dagpenge system,” Thorning-Schmidt said at her weekly press conference on Tuesday. “Changing the length of time it takes to earn dagpenge will not help people who risk falling out of the dagpenge system.”

But Verner Sand Kirk, the head of AK-Samvirke, disagrees.

“Thorning-Schmidt is simply wrong,” Kirk told Jyllands-Posten.

It currently takes 52 weeks of employment over the past three years to earn dagpenge and Kirk argues that reducing this demand to 26 weeks would help many who can only secure short-term contracts.

Anita Vium Jørgensen, the chief economist at Denmark’s largest union 3F, agrees and thinks that a fifth of those that risk losing their benefits could be helped by shortening the earning period.

“Many of our members are finding work here and there and would be pulled out of the danger zone if they could earn dagpenge in 26 weeks,” Jørgensen told Jyllands-Posten.

The metal worker’s union, Dansk Metal, started the debate on Monday when it recommended shortening the length it took to earn dagpenge while also cutting the length of time it can be claimed from two years to 18 months.

The coalition government is split on how to approach the problem, however. The centrist Radikale have ruled out making any changes to the system while Thorning-Schmidt’s statements yesterday overruled dissenting MPs from her own party who said on Monday that they supported Dansk Metal’s proposal.

The third coalition party, the left-wing Socialistisk Folkeparti, agreed over the weekend at their annual party conference that more needed to be done to help Danes who could not find work and were going to lose their dagpenge.

The government's sometimes-support party, Enhedslisten (EL), has threatened to institute a vote of no-confidence in the government if a dagpenge solution isn't found. Thorning-Schmidt has promised to meet with EL on the subject before parliament breaks for its summer recess. 

Dagpenge is a generous unemployment benefit that is equivalent to around 17,500 kroner a month before tax. It can be claimed for two years after someone loses their job as long as they have been employed and paid into an unemployment insurer, a-kasse, for 52 weeks in the past three years.

Those who lose their dagpenge will have to rely on the far less generous benefit kontanthjælp, though people with assets or a spouse who can provide for them may have to do without any form of government support.

The dagpenge reform that the government introduced in January was passed by the former centre-right government with the help of far-right Dansk Folkeparti (DF). DF's current leader, Kristian Thulesen Dahl, told Jyllands-Posten, however, that his party may support changing the dagpenge rules.

"We need to strike the right balance so that it remains attractive to take a job and work into the system, while also not making it too easy for people to earn the right to dagpenge through short-term contracts and abuse the system," Dahl said.

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