If your family’s total household income is below a certain threshold, you can apply to the municipality for an extra allowance so that it will be cheaper or completely free to have your child in daycare. This is called an income-based allowance.
When you apply for an income-based allowance, the starting point is your monthly household income. Your monthly household income is used to calculate your annual income (multiplied by 12) to find your family’s income-based allowance percentage on the scale.
The income thresholds for 2021 are as follows:
- up to DKK 185 701 – income-based allowance corresponding to all out-of-pocket fees that are eligible for allowance
- DKK 185 701 to 576 799 – partial income-based allowance
- DKK 576 800 and over – no income-based allowance
The income thresholds are increased by:
- DKK 7 000 for each resident child under the age of 18 in addition to the first resident child
- DKK 64 967 when the parent who is entitled to the place and the income-based allowance is a single parent (2021)
Recalculation of the income-based allowance
When the municipality is to calculate and later recalculate your income-based allowance for a specific month, the municipality bases it on the household’s monthly income. When calculating the income-based allowance for an individual month, the municipality uses the information that you provided when applying. For the purpose of recalculating your monthly income-based allowance, the information on your monthly income is pulled from the Danish Tax Agency’s so-called income register. There are special rules for, among other things, income from self-employment and income that is not taxable in Denmark.
More information on the rules, and the current income thresholds, are available on the Ministry of Children and Education website.