Medical and rehabilitation allowance

Medicare and rehabilitation payments are for people who are unable to work or study due to illness, accident or trauma.

General

Persons with rehabilitation pensions at 31. August 2025

All those who have an approved rehabilitation period longer than until 31. August 2025 will receive medical and rehabilitation payments from 1. September 2025. You do not need to apply or submit new data.

The period of validity of the rehabilitation period approved will be paid out before 1. September 2025.

All those who have a rehabilitation pension on 31. August will receive further information about their status in the new system as the changes come closer to an end.

For whom

You may receive sickness and rehabilitation benefits if you have a long-term or severe health problem, or if you have a disability that is considered to have a permanent effect on your ability to work and if you:

• are receiving approved treatment or rehabilitation

• waits for treatment or rehabilitation to begin

• cannot perform rehabilitation due to health problems

• are looking for a job after rehabilitation

• has been domiciled in Iceland for 12 consecutive months prior to the start of receiving sickness and rehabilitation benefits

• has exhausted the right to sickness benefits from the employer and payments from the union health insurance fund

Period

You can receive sickness and rehabilitation payments for a maximum of 60 months.

Individuals in a vulnerable situation and with multiple problems who need more rehabilitation can apply for an extension of up to 24 months.

Individuals registered in the Directorate of Labour as a job seeker after rehabilitation can keep payments for 3 months.

Free income limit

The general free-income limit for medical and rehabilitation benefits is40.000 ISKper month and the special free-income limit for employment income is 160.000 ISK per month.

Age add-on

Those who receive sickness and rehabilitation allowance are not entitled to an age supplement.