Since the Danish ratification of the 1951 Refugee Convention, Denmark has granted rights to newly arrived Convention Refugees that other foreigners are not entitled to. Newly arrived foreigners have no right to social benefits, however according to the Refugee Convention article 23 Convention Refugees living lawfully in a member state has the same right to social benefits as the citizens of that country. Consequently, those Refugees who are not able to earn an income right away received social benefits on an equal footing as Danish nationals until they found employment.
In 1998 the new "Introduction benefit" was introduced in order to assist the Convention Refugees in the process of entering the labor market. According to the Government, refugees had no incentive to take a job, because the amount of social benefits in Denmark is too high, and thus the new Introduction benefit was about half the size. Accordingly, the United Nations High Commissioner for Refugees (UNHCR) contacted the Danish Government and informed that this new policy was in violation with article 23 of the Convention. Also other UN bodies expressed their concern  and in the fall of 1999 the policy was dismantled by the Government, thus Convention Refugee would again receive the same amount of social benefits as before 1998.
In 2002, however, a new liberal Government re-invented the policy that Refugees should only receive about half the amount of benefit as other citizens according to the Law on Integration establishing the so-called "Starting allowance". This time however, the new Government included Danish citizens, who after living abroad for a number of years, are returning to Denmark. This way round, it was argued that the Refugees were not discriminated compared to the group of Danish nationals in a similar situation - i.e. those who entered Denmark, just like the newly arrived refugees. Nevertheless the UNCHR again observed that this is discriminatory and a number of test cases were thus taken to Court on behalf of refugees.
The first test case was decided on 15 February 2012 by the Danish Supreme Court. According to the ruling the "Starting allowance" is not in violence with the Danish Constitution or the European Convention on Human Rights, and accordingly the Integration Act (Starting allowance) is not discriminatory.
The Court decision was made just after the decision of the new center-left Danish Government to dismantle the Starting allowance in 2012 in order for Convention Refugees to (again) receive social benefits on the same level as Danish Nationals. With the recent Court decision, however a change in political power would allow future Governments to reestablish the "Starting allowance", and therefore the decision of the Supreme Court will be challenged at the international level.

Note:
UN Committee on Economic, Social and Cultural Rights, Concluding Observations on Denmark 1999:
 "16. The Committee is also concerned that the new Alien Integration Act may have a discriminatory impact on refugees." E/C.12/1/Add.34, as of 14 May 1999.