An individual's unchanged allowance under the old system is estimated. A deduction of 65% is calculated for all income except that which comes from TR. If this amount is higher than the individual's allowance under the new system, a comparative payment is made to ensure that the person's allowance is not reduced.

Only recipients of disability pension with reduced residency periods may potentially fall into this group.

Let's take the example of an individual who lives alone, has a 50% residency entitlement, receives a full age-related supplement, and has an income of ISK 100,000 per month.

ISK 461,194 estimated unreduced allowance in the old system*
-ISK 65,000 deduction due to income
-ISK 246,670 allowance in the new system
= ISK 149,524 supplement due to the changed system


*Unchanged allowance in the old system is estimated by adding together the subsistence standard of the maintenance supplement and the portion of the age-related supplement and income guarantee that was exempt from its reduction. This approach ensures that the amount will never be lower than it actually is, and in some cases, slightly higher.