Citizens’ proposal would shift social benefit costs to state

A citizens’ proposal would make the state solely responsible for funding public benefits such as cash assistance and disability pensions, DR reports. Its five proponents say the change would distribute costs more evenly between wealthy and poorer municipalities.

The proposal was put forward by residents of Lolland and neighbouring Guldborgsund. They say recent budget cuts in Lolland, including plans to close sports halls used by a local handball club, prompted them to call for a new approach.

Municipalities would continue to process applications for benefits, but the state would pay the full amount when a person qualifies under current law.

At present, the state pays 80 per cent of the cost during the first four weeks, while the municipality pays 20 per cent. The municipal share then rises over the course of a year. After a year, the municipality pays 80 per cent and the state 20 per cent, according to Mogens Ove Madsen, a lecturer in social economics at Aalborg University.

Per Nikolaj Bukh, a professor of management accounting at Aalborg University, doubts the proposal would work if municipalities continued handling cases while the state covered all the costs. Madsen disagrees, saying state rules could govern how municipalities administer the funding. He argues that some outlying areas are falling behind and cannot afford social and elderly care costs.

One of the proposal’s backers, Paw Justin Mistarz of Maribo, said the group’s main aim was to prompt debate about how municipal funding is organised.

A funding committee under the Ministry of Economic Affairs and the Interior is analysing the equalisation system, with its report due by the end of 2027. Political negotiations and legislation are expected to follow, and changes to the system are expected to take effect in 2029.