Child benefits

Parents receive child benefits in the year their child is born.

The child benefits paid in the year following the birth are reduced by the amount paid during the year of birth (the first two payments).

Child benefits paid in the year of birth:

• are paid automatically to parents and do not require an application,

• are deducted from the child benefits paid in the year following the birth,

• are subject to the same income reduction rules as ordinary child benefits,

• are the same amount for married couples, cohabiting partners and single parents,

• are divided equally between married couples and cohabiting partners, with marital status determined according to the National Registry for the relevant quarter,

• cannot be declined, even if it is expected that some or all of the amount will have to be repaid later, and

• have been paid since 2025.

Parents of children who move to Iceland also receive child benefits automatically in the year of arrival, subject to the same rules.

If a child moves out of Iceland during the year, the payment is discontinued from that quarter onwards.

Payments in the Year of Birth

Child benefits for the year of birth are paid up to three times during the year. Parents of children born early in the year therefore receive more payments.

Payments are made:

• 1 May for children born in January, February and March.

• 1 August for children born in June or earlier.

• 1 November for children born in September or earlier.

For example, parents of a child born in February receive a total of three payments during that year.

Parents of children born after September receive their first child benefit payment on 1 February of the following year.

The payments made in the year of birth are deducted from the advance child benefit payments made on 1 February and 1 May of the following year.

The total amount of child benefits paid during the year of birth and the following year is the same regardless of when during the year the child is born. More payments during the year of birth result in correspondingly lower payments the following year.

If the child benefits paid during the year of birth exceed the advance child benefit payments for the following year, the excess amount becomes a debt that must be repaid when the annual tax assessment is issued.

Calculation of Payments

Child benefit payments in the year of birth are calculated on the same basis for all parents:

• The calculation is based on half of the basic child benefit amount payable to married couples and jointly assessed cohabiting partners.

• Income-based reductions are then deducted. These depend on the parents' marital status in the same way as for ordinary child benefits.

• 12% of the remaining amount is paid in each payment during the year of birth.