New disability pensions

General

A new disability pension from 1. September 2025 is for those who are assessed with a 0 - 25% ability to work on the labour market according to an integrated expert assessment. The new disability pension is permanent. It replaces the disability pension, income insurance and special maintenance allowance.

For whom

Individuals who are unable to perform work on the labour market because of their ability to participate in the labour market are assessed 0 - 25% according to integrated expert assessment will receive disability pension.

_{If you have a valid disability assessment until 31. July 2025 or less}

You must submit an application for a revaluation before 1. September 2025 if you need a continued disability pension. A standard revaluation will then be carried out according to the current system. If the revaluation is approved, permanent disability pension payments will be approved from 1. September 2025.

If an application for a re-evaluation is received after 1. September 2025, the applicant will undergo an integrated expert evaluation according to the new system.

_{If you have a valid disability assessment on August 31, 2025}

You will receive a disability pension from 1. September 2025 according to the new system according to your income. The vast majority of those who receive disability pensions in the current system will receive higher payments in the new system.

After 1. September 2025, a person entitled to a disability pension may request an integrated expert assessment to transfer to a partial disability pension. If this is beyond the applicant's control, the application may be withdrawn.

Disability grant

With disability grant until July 31, 2025 or less

Those who receive a disability grant and have a valid disability assessment until 31 July 2025 or less must undergo a traditional reassessment in the current system. The application for re-evaluation must be received before September 1, 2025.

With disability grant on 31. August 2025

Those who receive a disability grant and have a valid disability assessment until 31 August 2025 will be transferred to the new system and will receive permanent payments from 1 September 2025.

Those who receive a disability grant can apply for a disability pension or a partial disability pension after September 1, 2025, and must then undergo an integrated expert assessment.

Amounts and free income limits

The vast majority of people who receive disability or rehabilitation pensions under the current system will receive higher payments in the new system on 1. September 2025. It is worth pointing out that different factors affect individual payments, such as age, residence, whether you live alone, have children, what income you have and more. The Social Insurance Administration will provide information on individual payments to you as soon as possible.

A full disability pension from 1. September 2025 is:

• 443.000 ISK per month before tax with household allowance,

• 380.000 ISK per month before tax without home allowance.

Disability pensions are income-related, which means that other income has a downward impact.

The general maximum amount of the disability pension will be 100.000 ISK per year.

In the pension calculator, it is possible to calculate payments in the new system.

The general freehold shall cover all income of the payment recipient that affects his payments to the Social Insurance Administration, including employment income, pension fund income and capital income.

However, those who receive little disability pension will not be able to receive a special income allowance.

Effects of residence

The full residence rate will continue to be based on a 40-year residency period in Iceland between 16 and 67 years. This will not change in the new system.

Home allowance

The current conditions for home allowance, do not change in the new system

The home allowance is income-related and reduces the total amount of pension, home allowance and, if applicable, an age supplement by 45% of the pensioner's income above the free-income limit, until it is eliminated.

Child pensions

There will be no changes to the child pension. The child pension is paid to the children of invalidity pensioners, partly invalidity pensioners and beneficiaries of sickness and rehabilitation benefits. The amount of the child pension is a fixed amount.

Age add-on

Those who are entitled to disability or partial disability pension can receive an age supplement, subject to certain conditions. Age supplements are not paid to those who are entitled to sickness or rehabilitation payments.

A full 30.000 ISK supplement will be paid to those aged 18 to 24 years old when either the criteria for a rehabilitation pension were first met or when the disability assessment was first approved. This applies whether the first disability assessment took place before or after 1 September 2025. The amount will be reduced by 5% from 25 years of age until 44 years of age and will not be paid to those over 43 years of age at the time of the first disability assessment.

Example: If a person receives an approved rating for the first time at 25 years of age, the person concerned will receive 95% of the full age supplement.

Example: If a person receives an approved assessment for the first time at the age of 43, the person concerned receives 5% of the full age supplement and keeps that payment.

Age supplement is income-related and reduces the combined amount of pension, household allowance and age supplement if about 45% of the pensioner's income exceeds the exempt income limit, until it is cancelled.