The Danish welfare state is based on the Nordic welfare model with its general financing. Social rights, in principle, cover all citizens and are free. The principle rights are not restricted to certain groups or linked to certain requirements, but many benefits (both in kind and in cash) are only available under certain conditions.
It is also every resident's constitutional right to receive public support for themselves and any dependents, if they are in need, and if all other possibilities have been exhausted. The health system is a National Health System and it covers all residents. The social system is financed by government subsidies, by the general taxation system, by the local authorities, and to a smaller extent from employers/employees contributions. This is the case for needs related benefits and benefits covering social contingencies. It is especially for what regards the specifically labour related risks, i.e. unemployment and employment injuries and occupational diseases, that the social system builds on the principle of private insurance.
Entitlement to insurance-based benefits presupposes a present or previous affiliation with the labour market. The benefits covering social contingencies (apart from the old-age pension) are also work-related, as it is the incapacity to work that creates the entitlement to the benefit. The aim of all benefits (except old-age pensions and the like) and related rehabilitation schemes is to reintegrate the individual into the labour market and into a position of self-support. Research fellows might not have a right to the reintegration programme.
The administration and organization is divided between many different units. The overall responsibility for social protection is divided between four different ministries, cf. point 3.7 contact points.
The administration of the Danish social system is mainly decentralized to a local level, as the municipalities (kommunerne) have the responsibility for administering the benefits. It is, accordingly, the municipality of residence which holds the social obligation towards the local residents. The municipal authority collects its own taxes and in that way contributes to the payment of public expenses. Discretional powers can be used to determine the level and supply of benefits in kind, whereas the level of the benefits in cash, in most cases, are regulated by law. This also implies that research fellows in case a specific contingency arises will need to contact the municipality in which they are registred as citizens.
The counties (amterne) administer and finance the health system, and receive part of the tax paid by the citizens to cover these expenses.
c) Social Security and migrant workers
Regulation 1612/68 gives the right to free mobility of labour to EU citizens, who have undertaken paid labour in Denmark, or who have become unemployed after having had worked in Denmark. It also gives the right to receive benefits according to the Social Assistance Act, if they have obtained a work and residence permits. For a research fellow working here for a limited period the conditions will be the following:
1) If the person is sacked for no fault of their own the person will be eligible for social assistance
2) After the period of work is done the individual will have to apply for permission to stay and will then be covered by the social assistance scheme while this application is being considered.
Social Security in Denmark concerning EU migrant workers: Application of Danish laws.
Denmark has, like other EU countries, committed itself to comply with the conditions and requirements of EU Regulation 1408/71, and of EU Regulation 574/72 for the implementation of Regulation EU 1408/71. The regulation entitles citizens from the 12 member states to the following social security benefits and services:
- sickness and maternity benefits
- invalidity and rehabilitation pension
- old age pension
- survivors benefits
- occupational diseases and employment injuries
- unemployment benefits
- family benefits
In a Danish context the Regulation 1408/71 applies to many different statutes.
The rehabilitation measures are, as mentioned, included in the statutes relating to migrant workers. What regards the other benefits under the Social Assistance Act, EU citizens are not entitled according to Regulation 1408/71 to receive social assistance in the form of cash benefits.
Workers who are, or have been at some period, covered by the social security legislation in one or several member states, and who are citizens in one of the member states, or refugees or stateless persons residing in a member state, are covered by Regulation 1408/71. In a Danish context a worker is defined as any person performing paid work, who is comprised by the law of the compulsory occupational pension fund, the Labour Market Supplementary Pension (ATP).
Every employed worker between 16 and 66 years, who works 9 hours a week or more, is compulsorily included in the ATP pension system. As research fellows are expected to perform certain duties for the institution where he/she is employed, e.g. research, teaching or publishing articles, they are therefore regarded as an employed worker with the related obligation to be a member of the ATP system. The following description of the entitlements will therefore concentrate on the position of employed workers. Likewise, it is presupposed in the description of research fellows social rights that they reside in Denmark for minimum of 6 months as described in the general conditions.
Family members of research fellows are ensured rights as family members, and the definition of a family member is defined according to the scope of application of the benefits they can claim. Likewise with the definition of surviving relatives, the definition of a surviving relative is set according to the scope of application of the benefits directed towards this group.
d) Specificly about EU-regulation 1408/71
The competent state in relation to 1408/71 concerning the payment of the benefit is the state where the workplace is situated, i.e. as the workplace is situated on Danish territory, the Danish state is the competent state.
1408/71 builds upon four principles:
1) Persons within the scope of application who are residents in another member state are secured the same rights and duties as the national of the competent state - i.e. there will not be discrimination against citizens of other member states.
2) Credits earned in another member state must be included in the determination of the qualifying period for the payment of the benefits.
3) The benefits can be exported to the member state where the citizen is residing, if the entitlement period has been fulfilled in another member state. This concerns cash benefits which can be exported to the state of residence. Regarding benefits in kind, a system of reimbursement ensures that the citizen can receive service and benefits in kind in the state of residence.
4) The principle of pro-rata-temporis shall ensure that the citizen receives a benefit according to periods of insurance, working periods or residence periods spent in each member state. The principle is to be applied in the situation where a worker has accumulated his qualifying period for pension in more than one state. The share of payment paid from each of these states must be proportional to the qualifying periods in each state. The aggregated benefit must however be no less than the benefit which the citizen would be entitled to according to national law. According to Danish legislation it is the time spent in Denmark which is the basis of calculation of the pension. As this might be the same in other countries it could be of importance for the research fellow to make sure of that the stay in Denmark is taken into consideration in the fellows home country, for example, when fullfilling conditions for receiving pension in home country.
3.2. Information on compulsory social contributions
In the legislation concerning the Danish National Health system it is stated that everyone residing in Denmark has a right to receive free preventive and curative treatment by general practitioners and at special clinics. Furthermore, medicine and dental care, physiotherapy are partly reimbursed. As a National Health System, the health insurance contributions are not paid separately but are part of the general tax payments.
As a rule, there is a free choice of general practitioner. To prove the right to receive medical treatment at a general practitioner's clinic, it is necessary to show a Health Insurance Card stating one's address and personal identification number. Urgent treatment at a casualty ward will always be available even if one cannot show a medical card. Family members, i.e. a spouse or cohabitant and children under 18 years, enjoy the same rights. This means that a research fellow after arrival in Denmark should contact the local municipality in order to get a Health Insurance card. If the research fellow is covered by his/her own national social security there will be no waiting period in order to receive medical service. In order to document this an EU-form 104 should be brought to Denmark. If the person is not covered there will be a waiting period of 6 weeks before being entitled to receive treatment.
It is the employer's obligation, and not the employee's, to cover industrial injuries and occupational risks. A research fellow does therefore not need to have an insurance in Denmark or in their home country during the stay in Denmark.
Unemployment insurance is not obligatory in Denmark. It is based on voluntary membership of an unemployment insurance fund, where certain conditions should be fulfilled, the main condition being that one has a job. Membership of an unemployment insurance fund is not a guarantee for receiving unemployment benefit. Criteria concerning length of membership, duration of job, reason for being unemployed influence the rights to claim benefit.
Social pensions are awarded on grounds of residency and are not based on contributions. The Labour Market Supplementary Pension (ATP), is however, based on minor contributions from wage earners and employers all depending on the number of hours worked and is compulsory for wage-earners working more than 9 hours a week, i.e. the research fellow will have to pay this.
There is a legal obligation to take up insurance if one has a house, car, motorbike, moped or dog. Other types of insurance, e.g. family insurance, accident insurance, life insurance etc., are not compulsory.
3.3. Information on voluntary insurance or social contributions
It is possible to supplement the coverage one has through the universal health insurance system by taking out an additional insurance with a private insurance company. In this case, extra costs such as those incurred at the dentist, optician and chiropractor are reimbursed.
Private pension schemes exist to supplement the old-age pension, and it is possible to pay to such a system and get a reduction in taxable income, except when paying the specific tax for researchers.
Furthermore collective agreeements includes supplementary pension. A research fellow will typically be employed in accordance with such a collective agreement which means that the employer will have to deduct the individuals own contribution before paying the salary and also that the employers contribution will be deducted from the amount described in the Human-Mobility and Capital programme, which as already described are expected to cover these expenditures.
In case of the death the Danish system does not cover the transport cost back to the home country. The EU-citizen should, therefore, if they are not covered by the home country's legislation, take out an insurance to cover these expenses.
3.4. Information on transfer of individual rights.
Sickness and pension
One must have a Health Insurance Card (sygesikringskort) to be entitled to receive free medical treatment at a general practitioner's. When a person has registered at the National Registration Office there will often be a waiting period of 6 weeks before the person receives the Health Insurance Card. In principle the waiting period of 6 weeks runs from when the fellow enters Denmark. However, following the principle of totalization previous periods of insurance in another member state will enable the EU citizen in Denmark to be immediately covered. In order to be covered the EU-form 104 should be brought to Denmark.
There is no requirement of previous insurance when one wants to take up a private accident insurance.
Entitlement to a Danish social pension is obtained when the person has lived in Denmark for a total period of three year from his/her 15th year to the 67th year. However, according to Regulation 1408/71, the principle of totalization means that any periods of insurance or residence from another member state can be included when the entitlement to a Danish pension is assessed. The person must, however, have spent at least one year in Denmark to obtain a right to a Danish social pension.
The pension act treats the right to pension as an individual right, and family members are therefore not covered as such. However, as a family member of a person who is or has been covered by the Pension Act, they can, to a certain extent, acquire some derived rights.
According to the principle of totalization, a research fellow of category 30 from one of the member states can have his former periods of employment or insurance payment periods transferred when he/she wants to enroll in a Danish unemployment insurance fund. Membership is voluntary. Membership is of importance for the entitlement to unemployment benefits which normally require one year of membership. Two different sets of rules apply to the export of insurance or employment periods depending upon whether or not the person has been a member of a Danish unemployment insurance fund within the last 5 years.
For persons who have not previously, or within the past 5 years been a member of a Danish unemployment insurance fund, the right to totalize insurance periods from another member state depends on whether or not the person finds a similar job in Denmark within 8 weeks. If the time-limit is exceeded the insurance periods cannot be exported and the person must follow the ordinary rules for enrollment in a Danish unemployment fund, i.e. must fulfill the requirement of being employed and wait 1 year before the entitlement to the unemployment benefit is obtained. It is, therefore of importance for the individual to contact a unemployment insurance immediately after arrival in Denmark if they want to be covered by the Danish system.
If the person has been insured within the last 5 years, the totalization of insurance periods does not depend on whether the person finds employment in Denmark. Previous insurance periods can be totalized, if the person applies for membership within the 8 week time-limit. If this limit is exceeded the rules mentioned above apply again. Documented employment periods can, however, still be exported. When leaving Denmark only the period when the individual has been member of a Danish unemployment insurance can be transferred to the research fellows national system.
For category 20 the same rules apply if they are not considered as students, although there might be a lower benefit (dimittend sats).
3.5. Information on social benefits
Holiday allowances, sickness and maternity benefits.
The Holiday Act states that every employee is entitled to five weeks' holiday within one year and to receive a holiday allowance during the holidays. The right to leave depends on the number of months worked - each month of employment entitles the employee to two and a half days' paid holiday. As the research fellowships from the EU are for fixed periods where the remuneration is all inclusive, the sum paid must be assumed to include paid holiday.
Supplementary instalments (e.g. 13th monthly payment) do not exist in Denmark.
In order to receive sickness benefit, a person must have had a connection to the labour market for 13 weeks before the sickness and have been employed in this period for at least 120 hours. The benefit paid is based on the normal hourly income for the sick person including the normal wage, but without holiday allowance, labour market pension contribution and A.T.P. As a maximum it cannot exceed the maximum for unemployment insurance divided by the normal 37 hours of work in Denmark. Until 1st. Januar 1995 the maximum benefit pr. hour will therefore be 68.81 Danish Kroner. The sickness benefit is limited to 52 weeks within 18 month with a possibility of extention. Thereafter the recipient is transferred either to the social assistance scheme or to a rehabilitation scheme. In case of sickness the research fellow should immediately contact the Danish employer.
Maternity benefits are payable for 4 weeks before and 24 weeks after childbirth at the same rate. The benefits payable for the first 14 weeks after childbirth are only for the mother. The last 10 weeks can be divided between mother and father. In addition the father has 2 weeks in immediate connection with the birth. The maximum rule and the calculation follows sickness benefit. Until 1st January 1995 the maximum will be 2546 Danish Kroner pr. week.
The social pensions in Denmark consist of old-age pension, disablement pension, early retirement pension and Labour Supplementary Pension (ATP). The old-age pension can be obtained from the 67th year, the disablement pension is awarded on ground of incapacity to work and has therefore no relation to the age of the claimant. The ATP is a supplementary pension system which every employee must be a member of. The contributions and the awarded benefits are, however, quite small. The calculations of old-age pension and the disability pensions are based on residence periods, are flat-rate and tax-financed, whereas benefits from the Labour Market Supplementary Pension (ATP) are performance-related. A research fellow will, on reaching the age of 67, have a right to receive benefits in relation to the paid contribution.
The early pension scheme was established in order to help people who have lost their working capacity, and therefore is comparable to the invalidity pension in other member states. Awarding of the pension is according to loss in working capacity, the claimant's age and social considerations. In case of loss of working capacity it is necessary to contact the local community and they can then advise on the procedure, for example, how to get the necessary medical certificate on whether or not the working capacity has been reduced to such a low level that early pension is possible.
The Danish social system no longer includes a survivors pension. The early retirement system has to some degree replaced the former survivors pension. The ATP pension system also includes the possibility of paying the ATP pension to the surviving spouse and children.
According to the principle of equal treatment in Regulation 1408/71, persons within the scope of application are secured the same pension rights as Danish citizens, concerning the old-age and the early retirement pensions. The pension can be paid out in any member state as the recipient wishes. For a person who has only obtained Danish pension rights, i.e. has not fulfilled the requirement to obtain pension rights from another member state, the person must have resided in Denmark for at least three years.
Regulation 1408/71 has laid down that if a person has been covered by the pension legislation in more than one member state, different calculation rules apply to the invalidity, old-age and death benefits. However, in a Danish context this is of no importance as Denmark has declared that the Danish calculation method should prevail as these rules benefit the migrant worker the most.
Other information If an accident occurs while working, the employee is entitled to receive medical treatment as a benefit in kind, even if he/she is not covered by social security in Denmark. A person is in fact always covered in case of emergency. This entitlement is equivalent to that regarding health insurance and it is therefore treated under the National Health Security. Costs in connection with physical retraining can be covered by the insurance company with which the employer has entered contract.
Benefits in cash are meant to cover loss of ability to work, compensation for injuries of a permanent character, intermediary benefits to surviving relatives, and compensation for loss of bread-winner. Benefits are calculated according to the average income in the year preceeding the accident. The rules of calculation are very difficult, but the highest income earned before an accident which can be taken into account is 288000 kroner, which will give a benefit which equals 230.400 on a yearly basis.
Unemployment benefits consist of a rate of 90 % of previous earnings with an upper limit and are given under the condition that the unemployed is available to the labour market, cf. the above described criteria for being member of an unemployment insurance fund. The benefits can be exported for up to 3 months if the person is applying for work in another member state.
Family allowances are tax-free and paid to the mother at a flat-rate for each child, with a higher amount awarded to children under 7 and single parents. A human-mobility researcher living in Denmark with his spouse and children is eligible for this child-benefit. If the person receives child-benefits from the home country the amount will be deducted from the Danish child-allowances. It is therefore in case the researcher is a single parent necessary to contact the local municipality as this type of child allowances is only paid upon request.
Surviving relatives of an employed worker have the right to receive a funeral grant even though they live in another member state. The benefit is means tested.
A housing benefits system consisting of different benefits has been created to secure equal terms of living for different incomes. The benefit is given to tenants in both private and social rental housing according to the size of the rent, the size of the dwelling, and the number of children. The benefits amount to 75% of the difference between the rent and a set upper limit. With the amount paid to research fellows they will normally not be entitled to housing benefit.
3.6. Information on fringe benefits
There are no publically identified fringe benefits available for research fellows as a special category of people. Some museums offer reduced admission prices and some travel agencies have special low-price tickets for Ph.D.students, especially if they are under the age of 25. Therefore a research fellow of category 20 should be able to state that he/she is still a student.
Receiving fringe-benefits as a supplement to income at the workplace is seen as taxable income according to Danish legislation.
3.7. Danish contact points
Social Security in general - The local Health and Social Security office in each municipality can give general information on these matters.
Unemployment - The Directorate for Unemployment Insurance (Direktoratet for Arbejdsløshedsforsikringen) must approve previous membership of an unemployment fund or previous employment in another member state. 31 10 60 11.
The Labour Market Board of Appeal handles the judicial review.
Health - The Ministry of Health (Sundhedsministeriet) has the overall responsibility. As proof of previous insurance periods in another member state, a form must be presented to the local social security administration. 33 92 33 60
Social pensions - The Social Security and Assistance Directorate (Direktoratet for Social Sikring og bistand) is the competent institution and contact point, but also in the local municipalities can further informations be received. 33 91 26 22