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Unemployment insurance funds

The purpose of the unemployment insurance funds in Denmark is to ensure economic support for the unemployed citizen. They also work closely with the municipalities.

Unemployment insurance is a voluntary scheme administered by Denmark's unemployment insurance funds and not by the state. The Danish unemployment benefit system is based on the Ghent system and has its roots in the early 1900s. In its present form, it dates to the late 1960s.

Denmark's unemployment insurance funds are private associations of employees or self-employed persons organised for the sole purpose of ensuring economic support in the event of unemployment.

Unemployment benefits are, however, largely financed by the State. There are all in all 22 unemployment insurance funds in Denmark.

The Act on Unemployment Insurance is administered by the Danish Agency for Labour Market and Recruitment.  

Entitlement to unemployment benefits

Under current rules, an unemployed person can receive unemployment benefits if they have been a member of an unemployment insurance fund for at least 1 year and has reported at least DKK 254.328 (EUR 34.131) as a full-time insured member or DKK 169.548 (EUR 22.754) as a part-time insured member, as income (2023) to the income registry in the last three years. Benefits can be received for a maximum of 2 years within a period of 3 years.

As a rule, the rate of unemployment benefit paid out is calculated on the basis of the 12 months with the highest income in the past 24 months. It is possible to receive up to 90 percent of the person’s previous income. However, it is not possible to receive more than the highest unemployment benefit rate, which in 2023 was DKK 19.728 (EUR 2.648) a month as a full-time insured member and DKK 13.152 (EUR 1.765) a month as a part-time insured member. Under certain circumstances it is possible to receive a higher benefit within the first three months of unemployment. This amounts to a maximum of DKK 23.449 (EUR 3.147) as a full-time ensured member and DKK 15.632 (EUR 2.098) as a part-time insured member

Graduates can become members of an unemployment insurance fund even if they do not have an employment record, on the condition that they join the fund immediately after graduation. Benefits can be received for a maximum of 1 year within a period of 2 years.

Graduates who have completed an English-speaking education have to meet certain Danish language requirements to receive unemployment benefits. The Danish language requirements can be met in several ways. A graduate who does not meet the language requirements can instead receive unemployment benefits by affiliation, if they have worked at least 600 hours within 12 months, during the last 24 months.

Unemployed graduates receive a reduced unemployment benefit ranging from 71.5 to 82 percent of the highest unemployment benefit rate within the first three months, depending on whether the graduate has dependents. After the first three months of unemployment, the rate ranges from 49.17 to 82 percent of the full unemployment benefit, depending on whether the graduate is below or above 30 years old, and if they have dependents.

Last updated: 09-10-2023