To have the rights for unemployment benefits, the applicant must have worked in Iceland, be between the ages of 18 and 70, be able to work in a general workplace, have legal residence in Iceland and be in the country.
Individuals can apply 14 days before they become unemployed. It is important to apply no later than the day you become unemployed, that is, when the notice period ends. You can always cancel the application.
Why apply early?
Unemployment benefits are paid from the date of application, not from the date of approval of the application.
Unemployment benefits are not paid retroactively.
It takes 4-6 weeks to process an application. If supporting documents are missing, the processing time may be extended.
Application status
When a decision is reached, a notification is sent to the applicant's e-mail address. If no such notification has been received, the application is still being processed.
Amount
The final decision regarding calculated rights and payment amount is not made until the application has been processed.
It may be helpful to check the following before applying:
Is my legal domicile registered in Iceland? Registration of legal domicile can be changed at Registers Iceland.
How do I want to use my personal tax credit? For information, see here at Skatturinn, Iceland Revenue and Customs.
Am I sure about when I graduated from school?
Do I have vacation days from my last job? When an employee leaves a job, the employer pays out earned vacation days. This pay can affect the payment of unemployment benefits.
What kind of driving licence do I have?
Am I receiving payments from a pension fund? They can affect unemployment benefits.
Do I have a part time job? Income can affect unemployment benefits.
Supporting documents
When applying for unemployment benefits, it is usually necessary to submit supporting documents along with the application.
The Directorate of Labour will request any missing documents if they were not submitted with the application. It is possible to submit documents after the application has been sent, through My Pages, by clicking the button "Submit Data."
Confirmation of employment period from the employer (in Icelandic). Trade unions can help if it is difficult to get a confirmation from the employer.
Certificate of work capacity from a doctor, if the applicant received sick leave allowance in the last 12 months. This applies when the reason for unemployment is illness or reduced work capacity.
Confirmation from the school, if the applicant is studying or completing studies. The study period and the number of credits must be stated.
Confirming job search
To receive unemployment benefits, you must confirm your job search once a month, between the 20th-25th of each month. This is done by clicking the orange banner that appears at the top of the Directorate of Labour's My pages.
When an individual confirms their job search:
Between 20th-25th, payment is made on the last working day of the month.
Between the 26th-3rd of the following month, payment is made 3-7 working days after the end of the month.
After the 3rd of the following month, the application is automatically deregistered and payment will be made with the next month’s payout if the individual contacts the service office.
It is necessary to confirm job search even though the application is still being processed, and also when payments have been suspended due to rule violations.
Check My Pages
It is important to regularly check messages that appear on the Directorate of Labour's My pages.
If documents are missing an applicant gets notified on My Pages. Applicants have to confirm job search on My Pages between 20.-25. each month even if the application is still being processed.
The reason for the rejection may be that the required documents were not submitted.
It is not necessary to reapply, but rather to submit the requested documents through My Pages.
If an individual is not satisfied with the decision of the Directorate of Labour, they can appeal the decision to the Welfare Appeals Committee.
First payment
Unemployment benefits are paid on the last working day of the month after the application is approved. Payment is made for the passing month.
Basic unemployment benefits and income related benefits
For the first two weeks, basic unemployment benefits are paid. Then the benefits are income related for three months.
Income related unemployment benefits are 70% of your average total wages up to a maximum of ISK 575,246 and are paid for three months.
It is not necessary to apply for income related benefits.
Confirm job search
To receive unemployment benefits, you must confirm your job search once a month, between the 20th-25th of each month.
This is done by clicking the orange banner that appears at the top of the Directorate of Labour's My pages. The names of the places where job applications have been submitted during the past month are also entered there.
When an individual confirms their job search:
Between 20th-25th, payment is made on the last working day of the month.
Between the 26th-3rd of the following month, payment is made 3-7 working days after the end of the month.
After the 3rd of the following month, the application is automatically deregistered and payment will be made with the next month’s payout if the individual contacts the service office.
It is necessary to confirm job search even though the application is still being processed, and also when payments have been suspended due to rule violations.
Check My Pages
It is important to regularly check messages that appear on the Directorate of Labour's My pages.
Possible reasons:
Job search has not been confirmed
Job search must be confirmed on My Pages between the 20th-25th of each month. If forgotten during the confirmation period, it can still be confirmed until the 3rd of the following month.
Application is still being processed
It may be that the application has not yet been processed. Processing can take 4–6 weeks after all required documents have been received. If documents are missing, they will be requested. If the documents are not submitted by the 20th of the month, payment at the end of that month cannot be guaranteed.
Are there messages on My Pages?
If additional documents or information are needed to complete the processing of the application, the applicant will receive a notification on the Directorate of Labour’s My pages. It is recommended to log in there daily.
Possible reasons:
Paid vacation days
Vacation days that an individual has earned from their last employer must be used. Information about paid vacation settlement should be on the last payslip from the employer. It is not possible to receive both paid vacation days and unemployment benefits at the same time.
Vacation days are allocated at the beginning of the unemployment benefits period unless the individual requests to take it at another time. The vacation period can be changed once by sending an email to greidslustofa@vmst.is.
The holiday period is from May 1st - September 15th each year. Vacation days that a person has earned before May 1st each year must be used in the next holiday period that begins on May 1st.
Income related benefits
Income related benefits are not paid for the first two weeks. Basic unemployment benefits are paid for that period.
Self-employed
The benefit entitlement for self-employed individuals is calculated as a percentage of the individual's assessed remuneration and the minimum benchmarks set by Skatturinn for the relevant occupational category.
Payslip can be found on My pages under ´´Electronic documents´´.
What affects payments?
While an individual is receiving unemployment benefits, they must report any income, side jobs, and other changes. Otherwise, they may have to repay overpaid benefits, or payments may be suspended, that is, a waiting period may be imposed.
