Domestic ( https://www.dr.dk/nyheder/indland )
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Social benefits should be paid exclusively by the state, according to a citizens' proposal
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The five people behind a new citizens' proposal want a more equitable distribution between poor and wealthy municipalities. Experts understand the idea but disagree on whether it can be implemented.
Paw Justin Mistarz is shown here with 'Denmark's Treasury'. (Photo: © Dagmar Richter) 25 minutes ago
There are major differences in the finances of municipalities across the country, and in some places, the latest budget negotiations have been brutal. The austerity knife has been brought out, and in several places it has cut straight through schools, sports halls, and nursing homes.
Especially on Lolland, which must save several hundred million kroner over the coming years.
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> It affected us, and we thought that we simply have to do something and
> fight a little for our area
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That has prompted a group of citizens from precisely Lolland and the neighbouring municipality of Guldborgsund to think creatively. They have come up with a citizens' proposal to move the costs of public income maintenance benefits, such as cash benefits and disability pensions, from the municipality to the state.
- We were really saddened to hear about the budget agreement in Lolland. It affected us, and we thought that we simply have to do something and fight a little for our area, says Paw Justin Mistarz from Maribo, one of the proposal's sponsors.
Paw Justin Mistarz sits on the board of Østofte Hillested Handball Club, which faces a difficult future after the budget agreement. The sports halls used by the handball club are set to close.
Part of what puts pressure on the finances of municipalities like Lolland is spending on disability pensions and cash benefits. That is why the five proposal sponsors write that each municipality should continue to handle case processing when citizens apply for, for example, a disability pension, but:
"The difference should be that the municipality should not simultaneously finance the income maintenance benefit itself. When a citizen is entitled to a public benefit under current legislation, the amount should be financed through Denmark's Treasury."
© Ritzau Scanpix
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How cash benefits and disability pensions are financed
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For the first four weeks, the state pays 80 percent and the municipality pays 20 percent.
Over the course of a year, the municipality gradually takes over a larger and larger share of the cost.
After one year, the municipality pays 80 percent and the state pays 20 percent.
That is what Associate Professor Mogens Ove Madsen explains to DR News.
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Is it realistic?
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Per Nikolaj Bukh, professor of management accounting at Aalborg University, is not sure the proposal can hold together.
- If the municipalities are still to handle case processing, as is proposed here, but the state is to pay all the costs, then we know from experience that this is going to go badly wrong, he says.
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> We need to make more radical changes to the way we secure
> funding for elderly and social costs in the municipal system
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Here, however, Mogens Ove Madsen, associate professor of economics at Aalborg University, disagrees:
- I don't think it necessarily has to be a big problem. State rules can easily be attached to the administration of the money that the municipality is to organise, says Mogens Ove Madsen, who also sees potential in the proposal.
- We need to make more radical changes to the way we secure funding for elderly and social costs in the municipal system. There are differences in how the individual regional areas develop. Some peripheral areas are left with a major backlog that means they cannot finance these things, says Mogens Ove Madsen.
The citizens' proposal would move heavy costs from the 'Municipal Treasury' to 'Denmark's Treasury' (Photo: © Dagmar Richter)
For Paw Justin Mistarz, it does not matter much whether it is exactly their proposal that becomes reality. He just hopes that the current system will be discussed.
- For us, it is about bringing it up for debate and seeing whether we can rethink this in a different way than the current municipal equalisation system, he says.
Right now, a financing committee under the Ministry of Economic Affairs and the Interior is working on an analysis of the equalisation system, which is to be completed by the end of 2027. After that, political negotiations and legislation will begin. The changes to the equalisation system are expected to take effect in 2029.
- I think that is a long-term prospect, and in the meantime we have to struggle along until we can see what that proposal looks like. And if we then get another proposal that does not seriously address this and say that some things ought to be a state responsibility, then we will not solve this, says Mogens Ove Madsen.
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