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Page:Economic Development in Denmark Before and During the World War.djvu/61

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OLD-AGE PENSIONS

Naturally the act was severely criticized by economists. On the one hand, it was asserted that it involved a certain arbitrariness in the amount of the annuities. One municipality might be very niggardly, another very liberal. The Berg-Hörup bill would have answered better, it was contended, in that its pensions would be fixed amounts, whereas those of the new bill might easily create very great burdens. The other objection was of a more serious nature. There was grave danger, it was claimed, that the people would tend to become careless and extravagant if they were assured support in their old-age. Moreover, persons who had denied themselves things in order to save a little money would receive nothing; while those who had spent all their earnings would be taken care of by the state and the municipality. There seems to be no special occasion to fear this, however, especially after a liberal amendment having been made enabling the people concerned to have a legacy, their dwelling, or a little income from an annuity. Even now municipalities may, on their own initiative, introduce a system of fixed rates, as Copenhagen has done.

The cost of the old-age pension system has greatly increased, as might have been expected, for the reason that an increasing number of old persons who previously would have come under the poor-relief system are now receiving old-age pensions. But this has come about under the influence of the general rise in prices and in apprehension of the needs of the people to be supported. For this reason the amount of the pension has been increased, though somewhat irregularly, since each municipality determines the amount of its own pensions. The government subvention was originally limited, as already stated, to 2,000,000 kroner; after some years this limit was extended to 2,500,000 kroner, and in 1902 the limit was completely abolished. In the fiscal year 1904-1905 the public expense had increased to 7,000,000 kroner; five years later it was about 10,000,000 kroner; and in the last fiscal year before the war it was 14,000,000 kroner. During the World