Unemployment benefits

Individuals may be entitled to unemployment benefits even if they have just moved to Iceland, if the country they moved from is within the EEA. A person who intends to seek employment in Iceland can be certified as having been unemployed in another EEA country with a U1 certificate. This can increase the right to unemployment benefits in Iceland.

Further information on U1-Certificates

Employees have been in paid employment, at a minimum 25 % employment rate.

• The study is based on a 12-month period.

• You can look back up to 36 months. Most often the last 12 months from the application are used for calculation, but otherwise it is the 12 months period that grants the most rights that are examined.

• If the applicant is on maternity leave or on sickness benefit, the period before that is considered.

Examples of rights

• 100% employment for 12 months entitles you to 100% payments.

• A 100% job for 6 months entitles you to 50% of your payments.

• A 75% job for 8 months entitles you to 67% of your payments.

• 50% employment for 10 months entitles you to 50% payments.

To have a minimum of 25 percent, you must have worked for at least 3 months in a 25 percent capacity.

Insurance fee

To have the right to unemployment benefits, the employer must have paid the insurance premium for the work.

Variable employment rates

This is based on the average employment rate over the 12 months period considered if the applicant has not been in the same employment rate. The right to benefits will never exceed the employment rate during the period or the employment rate that the applicant wants to work in.

Contracting

All jobs are included in the calculation of the rights. If the applicant was also self-employed, the income is also taken into account.

If you quit your job

An applicant who has resigned from work without valid reasons, or was chosen for his own resignation, can expect payments to be delayed at the beginning of the period of benefits. If an explanatory letter is not sent with the application, the processing of the application is delayed.

You can speed up the processing of an application by submitting an explanation of retirement through My pages, select "Explanation letter" as the type of document. The letter must state the reason for leaving the job.

If the applicant has been assisted by a union, in the period leading up to leaving the job, confirmation must be sent from the union that supports that. The applicant must contact his/her union to receive this confirmation.

Fishermen

The wage contribution of fishermen is based on the number of legal registration days. The monthly wage contribution of seafarers is considered to be 21,67 legal registration days. The registration must be completed before the person concerned receives unemployment benefits.

Conditions:

• Skatturinn must have been received a notification that an employer's register has been closed. The form is called: Tilkynning um lok starfsemi.

• Insurance fee has been paid for the work.

• The monthly income tax has been paid on a calculated salary. The amount must have been according to the guidelines of Skatturinn, at the minimum.

This applies to individuals who carry out professional activities on their own kennitala and those who carry out business activities with others. Furthermore, this applies when the applicant is a controlling party because of ownership or control.

Insurance fee

A self-employed person has a 100% right to unemployment benefits if the person has paid a continuing insurance contribution in the last twelve months before applying.

If the insurance premium has been paid for less than 12 months, but more than 3 months, in the twelve months preceding the application, the person concerned is entitled to the amount of the months in which he/she has paid income tax.

Calculated salary

An applicant may be entitled to 100% unemployment benefits if the person concerned has paid monthly income tax on calculated salary. The amount must have been according to the guidelines of Skatturinn, at the minimum.

• If the tax paid is less than stated in the guidelines, the amount of the tax is determined by the ratio of the amount of the calculated salary paid and the guideline amount.

• If the tax paid is less than 25% of the guideline amount for the relevant profession in the twelve months prior to the application, the right to unemployment benefits is non-existent.

Revenue reported once a year

Individuals who report income once a year must submit with an application:

• Contractor's declaration

• Confirmation by Skatturinn of payment of the insurance premium and cash payment.

Those who live outside the capital area can contact the District Commissioner.

If a person applies for unemployment benefits and has been on maternity leave, another 12-month period in the last 36 months is considered, not the period the person was on maternity leave.

If a person applies for unemployment benefits and has been in work-related rehabilitation, another 12-month period in the last 36 months is considered, not the period in which the person was unable to work.

Individuals who are waiting for final settlement of wage claims and are unemployed during the notice period may be entitled to unemployment benefits.

• Individuals must meet general conditions for the right to unemployment benefits.

• The portion of the wage claim that amounts to the sum of benefits paid at that time must be transferred. The claim is transferred to the unemployment insurance fund.

• An application for unemployment benefits also includes an application for participation in labour market measures.

Payment is made from the date the notice period starts to apply. After the notice period has ended, the person concerned can receive general unemployment benefits. Employees of a bankrupt company can receive income-related unemployment benefits.

You cannot apply for unemployment benefits until the company has been declared bankrupt.