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18th June 2026

Law changes from 1 July 2026

On June 15, Parliament of Iceland approved changes to the Unemployment Insurance Act that will take effect on July 1, 2026.

Reduction of the benefit period

From 1 July 2026, changes to the Unemployment Insurance Act will take effect, reducing the maximum unemployment benefit period from 30 months to 24 months.

This change applies to individuals who are considered unemployed under the Unemployment Insurance Act as of 1 July 2026 and who apply for unemployment benefits after that date. Applicants submitting a new application on or after that date will therefore be entitled to unemployment benefits for up to 24 months, provided they meet the other conditions set out in the law.

However, the rights of individuals who applied for unemployment benefits before the changes take effect will remain unchanged. Individuals with an active application or who have already started their benefit period before 1 July 2026 will keep their 30 month benefit period.

Participation in studies

From 1 July 2026, changes to the Unemployment Insurance Act concerning studies while receiving unemployment benefits will take effect.

Under the new law, the extent of studies that an individual may undertake while receiving unemployment benefits will be reduced from 20 credits to 12 credits. Students will therefore not be permitted to enroll in more than 12 credits per semester. This also applies to studies defined as Study with work. The change applies equally to studies at both secondary school and university levels.

Suspension/Waiting period

Effective 1 July 2026, the specific suspension that previously applied after 24 months of benefit entitlement usage will be removed. This means that an individual's application will no longer be automatically rejected if they receive a suspension after having already used 24 months or more of their benefit period, as specified in the previous legislation.