Rights at the start of pension

There will be changes in the time at which people acquire the right to a disability pension in Iceland and also how long they must have been domiciled here to apply for a rehabilitation pension.

Those applying for a disability pension must have been resident in Iceland continuously for at least the last three years before the disability is assessed as 75%, as has been the case. The date of the disability assessment will now be used instead of the date of the application, which is a concession for those applying for disability benefits.

The right to a disability pension is acquired when the person has been resident in Iceland for a continuous period of 12 months before disability is assessed as 75%, if the person has also a prior history of residence in Iceland, i.e. either has been resident in Iceland

• in Iceland for at least 20 years after the age of 16, or

• a minimum of five years after the age of 16, provided that residence abroad after the age of 16 has not exceeded five years.

This will be met by those who have temporarily lived abroad.

Youths living in Iceland at the age of 18 who receive a 75% disability assessment from that time will be entitled to a disability pension, regardless of their length of residence.

In order to apply for a rehabilitation pension, an individual must have been domiciled in Iceland for 12 consecutive months before payments can commence, instead of the general rule of three years' residence beforehand.

Change in treatment of foreign pension income

Social security pensions from states with which Iceland has concluded agreements will be defined differently from what has been agreed. As a general rule, social security pensions, which the Member States of the EEA Agreement have defined as such to the European Union, will be defined as benefits of the same type and will thus not be a reduction in social security pensions in Iceland. However, it must always be assessed whether the purpose, basis of calculation and conditions for the compensation are the same. Further provisions of international agreements must also always be considered.

The cases of those who already have TR pensions and also receive pension payments from states with which Iceland has concluded agreements will be reviewed with regard to these changes. The results of this review will be communicated to the party in the coming months. This work is expected to be completed this autumn. The amendment applies to the calculation of social security pension payments as of 1 May 2023.

Maternity and paternity pay are not considered as income when calculating the cost of living supplement

Maternity and paternity pay will not be considered as income in calculating the special maintenance supplement from 1 May 2023, and will thus no longer be deducted from the maintenance supplement. Mothers' and fathers' allowances may be paid to single parents resident in Iceland who have dependents on two or more of their children under the age of 18, and who have the same legal domicile as the children paid. Those with a special support allowance and a maternity/paternity allowance from TR will receive further information by letter published on My Pages of TR.

Age supplement instead of age-related disability supplement

The age-related invalidity supplement is the payment made on the basis of the age at which the person received his/her first disability assessment. Those payments are called age supplements following the legislative amendments.

Change in interest rate benchmarks

Decisions on interest rates on over- or under-payments shall be changed so that instead of fixed interest rates, the interest rate decided upon and published by the Central Bank of Iceland at any given time shall be used as the basis for the project.

Amended setting up of the Social Security Act

The overall format of the Social Security Act changes, but a special section now covers old-age pensions and related payments and a special section on disability pensions and related payments.

The Social Security Act and the Social Assistance Act, following the amendments that took effect on 12 April, are shown here:

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