Unemployment benefits

Unemployed people can register on the unemployment list to become entitled to unemployment benefits. They will also receive counselling and assistance in the their job search.

Application and requirements

  • Applications can be made for unemployment benefits in the service bureaus of Directorate of Labour which are run in every region in Iceland. An applicant for unemployment benefit also registers for a job search.
  • Unemployment benefits are paid every month.
  • Anyone receiving unemployment benefit must meet the following requirements:
  • they must be actively searching for a job and be prepared to be hired for regular work,
  • they must report to the Directorate of Labour once a month, whether or not their job search has been successful,
  • they must report to the Directorate of Labour when they have found work, and report any income received.
  • All applicants for unemployment benefits draw up a job-search schedule in co-operation with a job consultant, who also advises them on job seeking and on the resources available for the unemployed.
  • Job seekers may lose their benefits if they do not follow a job search schedule or refuse the solutions offered to them.
  • Farmers, small-craft fishermen and truck drivers apply for benefits at Directorate of Labour the same way as other unemployed people, but they receive their payments from the Social Insurance Fund for the Self-employed. Special legislation applies to this fund.
  • If applicants for unemployment benefits feel that the service of the Directorate of Labour has been unsatisfactory, they will be able to make an appeal to the Unemployment Insurance Appeals Board at the Unemployment Insurance Fund.

Benefit amounts

  • For the first ten days of unemployment the basic benefits will be paid, after which they will be income linked for three months if the requirements for the income linking of benefits have been met.
  • A person who receives full unemployment benefits and who has dependents under the age of 18 will receive 4% of the base benefits for each child.
  • A mandatory pension-fund contribution must be paid out of unemployment benefits, but the Unemployment Insurance Fund will pay the matching contribution that would otherwise be paid by the employer. The Directorate of Labour will arrange for the payment of union membership fees, if requested.

Persons enjoying full unemployment benefits receive repayment for the purchase of medicines.
Those who have been unemployed for more than 6 months and who have received a discount card from Social Insurance Administration, pay for healthcare services according to the tariff applicable to pensioners until the end of the year. They must produce a certificate from the Directorate of Labour for the Social Insurance Administration.

Links of interest

Laws and regulations