The Holiday Allowance Fund is a new fund that will manage the employees' holiday allowance in connection with the transition to a new Danish Holidays Act, which came into force on 1 September 2020. The new fund accommodates the wishes of both the employees and the employers. It ensures the employees’ holiday allowance, and furthermore allows the employers to keep the means as long as needed - at least until the individual's retirement age.
Reporting of frozen holiday allowance (max. 5 weeks of holidays) has taken take place for all employees upon the transition to the new Holidays Act in 2020, if they have been employed some time during the period from 1 September 2019 until 31 August 2020.
Holiday Allowance Fund
The holiday allowance will be managed by the Holiday Allowance Fund. The assets in the fund partly consist of assets paid into the fund by the employers and partly of assets, which the employers can choose to keep in their company as a loan.
The assets paid into the fund, will be invested by the fund in the financial markets, while the assets borrowed by the employers and kept in the company, must be indexed with an interest rate corresponding to the wage development.
In autumn 2020, in connection with the need to stimulate the economy during the covid-19 crisis, a political majority decided to allow disbursement of max. three weeks of holiday allowance, upon request. As a result of this decision, DKK 52 billion was disbursed to the employees.
At the time, the holiday allowance had not yet been paid or reported by the employers, and disbursement took place based on a loan from the state. The loan must subsequently be repaid on an ongoing basis, at the time when the employers pay the holiday allowance into the fund for their employees.
A total of DKK 108 billion has been reported to the Holiday Allowance Fund, and after the early disbursement in autumn 2020, DKK 56 billion remain in the Holiday Allowance Fund.
However, a political majority has again decided to open for disbursement upon request in spring 2021, once again, in order to to stimulate the economy due to the covid-19 crisis.