Unemployment benefits

• Unemployment benefits are not paid during the days of the contract work. The days of the project are to be notified before the project begins.

• The day must be reported as a work day, although work on that day takes less than 8 hours. No accumulation of hours is allowed for contract work.

All work must be reported at least a day before it begins.

• The work must be notified at least a day before it begins.

• On My pages, you can find the company ID number and name, the beginning of your job, the percentage of your job and the estimated amount of your salary before tax. If your income changes, you need to be notified.

• You can contact your employer and ask that they submit electronically through My pages of employers, under Confirmation of employment period. You can also get your employer to fill out a form and upload it to My pages through the submit data button and select the type of data Confirmation of employment period.

If part-time work ends

• It is important to inform the public about the termination of part-time work when the work is finished so that the employment rate and earnings plan stops to reduce the unemployment benefits.

• The termination of part-time employment must be notified by returning the employer certificate. The employer certificate must be submitted to reveal the reason for the termination of employment and confirm the employment rate and periods of employment.

These payments do not have an effect on the right to unemployment benefits. Therefore, they do not need to be reported.

• Child care benefits.

• Withdrawing personal pension.

• Inheritance.

• Social grants from local authorities.

• Mother's salary and father's salary.

• Child pension.

• Grants from union health funds that are not intended for subsistence. Examples are grants for physical education and courses.

• Grants from public funds or similar funds that a person receives for the development of their own business idea.

• Settlement of the last employer, except in the case of a settlement of leave (orlof) and the applicant has not disposed of unused leave.

• Other payments that are paid for a period during which the applicant did not receive unemployment benefits.

• Accident benefits and medical benefits that are paid for accidents or illness during a period during which the applicant did not receive unemployment benefits.

Furthermore, Article 36 of Act No. 54/2006 states:

‘In the case of other previously uncounted payments that are not intended for the maintenance of the insured, the Directorate of Labour shall assess in each case whether they should be deducted from unemployment benefits under paragraph 1.’

You need to unregister for unemployment benefits on My pages.

Unemployment benefits are not paid for the days a person is not in Iceland. This also applies if a trip is made over a weekend or during a public holiday.

Information about traveling from Iceland must be sent before leaving the country. Trips are reported by selecting a button on the front page of My Pages.

Those who have a U2 certificate do not have to report the trip.

The start and end of illness must be reported immediately.

A person who receives unemployment benefits is entitled to 5 days of sick leave. This means that sickness for up to 5 days in total has no effect on the right to benefits.

In each 12-month period, this sick leave can be used a maximum of two times. A person must have been registered for 5 months during the same benefit period.

If an illness prevents a person from actively looking for a job, a medical certificate must be submitted if the Directorate of Labour requests it. The certificate is uploaded to My pages via the Submit documents button. Medical certificate is selected as the type of document.

The Directorate can call for a medical certificate if a person does not attend a course or meeting and reports illness as a reason.

Children's illness

Individuals receiving unemployment benefits do not receive special sick days due to children's illnesses. It is not allowed to use the 5-day sick leave due to children's illness.

If a child's illness prevents a person from actively looking for a job, unemployment benefits are not paid for those days.

You must submit a medical certificate stating your current ability to work, as well as the beginning and percentage of your incapacity for work.

The establishment of a company must be reported. You must also report:

• Ownership in a company.

• Reopening operations that had been temporarily suspended.

• If an employer hires staff but is on benefits themselves.

Payments are postponed at the beginning of a benefit period if the applicant:

• terminates employment without valid reasons,

• causes the termination of their job,

• drops out of studies without valid reasons,

• reduces amounts of credits to meet the conditions of a study agreement.

If an explanatory letter is sent with the application it speeds up the processing of the application. If an explanatory letter is not sent, processing is postponed and the applicant will be given the opportunity to submit explanations or objections regarding a possible decision by the Directorate of Labour.

When payments of benefits are suspended at the beginning of a benefit period the applicant is not entitled to income-related unemployment benefits.

Payments can be suspended for:

• 2 months

• 3 months in case of recurrence

Those who work while receiving unemployment benefits, but do not report it to the Directorate of Labour, have to earn the right to a new benefit period.

Payments are suspended:

• If what needs to be reported is not reported,

• if a job offered is rejected without valid reasons,

• not participating in the creation of a job search plan or not following the plan,

• resources offered are rejected, for example taking part in a course,

• not attending scheduled interviews or a meeting without a valid reason.

Cancellation of penalties

Penalties imposed for two months can be cancelled. The conditions are that:

• The person worked for at least six months before reapplying and registering for unemployment benefits.

• The job was not terminated without valid reasons.

• The person did not lose his job for reasons that were their own fault.

If these conditions are not met, the suspension of payments is still in effect when applying for unemployment benefits again.

• Those who work alongside benefits without reporting the work.

• Those who are subject to suspension of payments and have received benefits for 24 months or more.

• Those who are subject to suspension of payments for breaking the rules for the third time.