Social Insurance Administration
Bill on a one-off allowance to be processed in Althingi
26th November 2025
In a bill from the Minister of Social Affairs and Housing, which was presented to Althingi on 10 November, it is proposed that a one-off payment in December be made for old-age pension, disability pension and new medical- and rehabilitation allowance.
A news item on the Government of Iceland website states: "The bill proposes a change from the arrangement for the lump-sum payment in recent years so that it better accommodates those with the lowest incomes. It is proposed that the full lump-sum payment will be ISK 73,390 and tax-exempt, in addition to which it will not lead to a reduction in other allowances."
The bill stipulates that those who have a registered legal domicile in Iceland on 1 November 2025 and have received the above-mentioned allowances from the Social Insurance Administration (TR) can receive the lump-sum payment, in proportion to the number of months the person has received allowances during the year. According to the bill, the lump-sum payment will not be made to deceased estates.
The bill is now being processed by Althingi, the Icelandic Parliament, and a final decision on the payment will therefore not be made until after the third reading in parliament. Following the discussion and processing by Althingi, TR will act in accordance with the parliament's decision.
We encourage clients to keep a close eye on My Pages on the TR website and on tr.is.
It should be noted that this is not the traditional December bonus, which will be paid on 1 December.