Answer 1

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Hi,

the danish unemployment insurance is financed by three sources:

1. All members of an Unemployment Insurance Fund ("A-kasse") pay, as part of their membership fee to the A-kasse, every month DKK 351 (2018). This is the insurance-fee. The insurance fee is fixed regardless of which A-kasse you are a member of. This is an income for the Danish State (not the individual A-kasser). This part covers between 27% to 56% of the total financing, depending on how you calculate this. Is it not possible to say exactly how much of the financing that are covered by this way, because while the number of A-kasse members are nearly the same every year (about 2.100.000), then there can be significant difference in the numbers of unemployed persons from year to year. The A-kasser receives the rest of the montly payment from the members, also called the administration fee. The administrations fee differs between the individual A-kasser from DKK 80 to DKK 236 per month.
2. Beyond the insurance fee included in the membership, every person who have a paid job in Denmark also contribute to the Unemployment Insurance Scheme. This happens through the tax. All employees in Denmark pay 8% of their income in a tax called "arbejdsmarkedsbidrag" (in english: labourmarket-contribution). As said all employees pays this regardless of they are member of an A-kasse or not.
3. The employers pay 2% of the financing.

There are some good explanations of the financing of the danish Unemployment Insurance Scheme online, but unfortunately the best and most precise is only in danish, for instance:

https://www.danskeakasser.com/hvem-betaler-dagpengene/ (from the danish association of A-kasser).

https://bm.dk/media/6122/nuvaerende-finansieringskilder-for-dagpengesystemet-pdf.pdf (from The Ministry of Employment).

If you think we can help you more, please comment on this.

Best regards,

Anders Weber, www.a-kasser.dk

Comments

Hi,
Thank you for your quick answer.

I would just have three more extra questions, which are:
1.Who does collect the insurance fees?
2.Is the aim of the “arbejdsmarkedsbidrag” only to finance the unemployment insurance?
3.Is the employer contribution going to disappear?

Best regards,

Gabriel

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Hi,

1. The Insurance fee is collected by the 24 A-kasser from their respective members. The montly memberfee include insurance fee and administration fee. It is also the A-kasse which pays unemployment benefits, however there is a refund scheme between the danish state and the individuel A-kasser, so that the A-kasser are compensated for the net deficit they have.
The individuel A-kasser are non-profit. So the A-kasser should only have their administration costs covered - not more.

2. "Arbejdsmarkedsbidrag" (The labor market contribution) was introduced in 1994 to impose on the employees a part of the expenses previously imposed on the state in connection with, for example, expenses for unemployment benefits, activation and training of unemployed persons.
Therefore the income from this "tax", does finance both insured persons (unemployment benefits) and persons who are unemployed but not member of an A-kasse. If you get unemployed, but is not member of an A-kasse, then you can get a cash allowance (in danish: "kontanthjælp").
Administrationsbidrag also finance "kontanthjælp", and expenses to activate and educate unemployed persons in general (both insured and not insured).  

When it was introduced back in 1994 there was a high unemployment rate in Denmark - and it was only meant to be a temporary tax.
But we have been paying the 8% all years since then.
In periods with low unemployment, like now, the danish state will make profits of the Unemployment Insurance Scheme.

So you can say that "arbejdsmarkedsbidrag" is like any other income tax.

3. I have not heard that the employer contribution is going to disappear. If you have any sources saying that, please let me know, and I can investigate further if you like.

Best regards,
Anders

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Hi,

Thank you for your answer.

Concerning the employer contribution, I have probably misunderstood the following paragraph, from the document of the Ministry of Employment (p.19) (I translated it with Google):

"I 2014 blev det som et led i beskæftigelsesreformen aftalt at udfase G-dage for ansættelsesperioder under 3 måneder, så de for denne typer af ansættelser helt bortfalder fra 2018. Udfasningen sker på en sådan måde, at antallet af G-dage fra 2015 reduceres fra 3 til 2, og at der fra 2017 kun er 1 G-dag."

So, does it means the number of g-days have been reduced to one for all kind of employments?

Best regards,
Gabriel

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Hi,

the document you refer to is a "workingpaper" from october 2015 by the "dagpengekommission" (a group of experts pointet out by the Government to look at and comment the current Unemployment Insurance Scheme).
According to this commision's work there was introduced a lot of changes to the danish Unemployment Scheme from start of 2017.

The rule regarding G-dage was changed from 1. of july 2017.

For terminations that take place on July 1, 2017 and later, the company must pay 2 G-days in all types of employment, no matter how long the employee has been employed.

The daily payment for the 1st and 2nd unemployment days (g-days) in 2018 are 860 DKK for a full day and 430 DKK for half a day.

We have an article on our website about G-dage (in danish):
https://www.a-kasser.dk/ændring-af-dagpengeregler/g-dage.html.
Also you can read about G-dage at star.dk ("The Danish Agency for Labour Market and Recruitment"):
https://star.dk/til-virksomheder/dagpengegodtgoerelse-g-dage-naar-din-medarbejder-stopper/

I think the agreement that is refered to in the "workingpaper" about reducing the number of G-days for short-term employees, has been changed later, so the current rule is that employer have to pay 2 g-days regardless of what kind of job is terminated.

Let us know if you need further information.

Best regards,
Anders, www.a-kasser.dk