Why are more and more people deciding to stay in Iceland permanently? First of all because of the high salary. Apart from that, the attention is drawn to social benefits in Iceland. Unemployment allowance, rehabilitation benefits are just some of them. Check what are the social benefits in Iceland!
Entry and stay in Iceland
Iceland belongs to the Schengen area, which allows EU citizens to travel freely between the countries without completing any additional formalities or permits. Border control is rare, but when crossing it, you must have with you one of the following documents:
- ID card
- passport
- temporary passport
If you intend to spend not more than 3 months in Iceland, you do not need to register or get a residence permit. However, if you take up a job in Iceland or decide to stay longer – it will be necessary to obtain a residence permit. For this purpose, register in the National Registry.
Living in Iceland – advantages and disadvantages
High earnings – without a doubt, are the main advantage of working in Iceland. In addition, there is a high demand for foreign workers there. The advantages also include:
- no additional formalities for employment in Iceland;
- high standard of living;
- Iceland is considered as one of the happiest countries in the world (according to the latest World Happiness report, Iceland ranks 4th).
Unfortunately, living in Iceland has also disadvantages – the high cost of living and the distance. Living in Iceland, we are separated from the rest of Europe and have to use flights. Moreover, Iceland has a harsh climate that may discourage some people. In summer, the average temperature rises to +12 °C. Added to this, are the polar nights (during the winter season, the sun comes out for a maximum of 4 hours).
Where to look for a job in Iceland?
The most popular industries in Iceland include:
- Gastronomy / hotel industry
- Fishing
- Agriculture
- Construction
- Physical work
The largest number of job offers can be found in the capital of the country – Reykjavik. As for the language, it is recommended to learn Icelandic during a longer stay. However, the vast majority of Icelandic citizens speak English, which facilitates communication at work and in everyday life.
Remember! Recruitment in Iceland starts much earlier. If the employer plans to hire a person from May / June, the job offer will be published in January / February.
Social benefits in Iceland
Below we have described the most important social benefits in Iceland. Check what allowances you can count on as an immigrant in Iceland!
Family allowance for child / children
The amount of family allowance in Iceland is determined on the basis of:
- annual income of the parent / parents;
- the age of the child;
- status (spouse, single parent raising a child, etc.).
Family allowance for a child is paid until the child reaches the age of 18.
Moreover, the parent must have a permanent residence permit in Iceland. The allowance can be obtained for children residing in Iceland or in another EU country (condition: the child’s parent is employed in Iceland or is connected to the Icelandic Tax System).
In 2022, the budget for family allowance was increased. What do the amounts paid to parents for children look like at present?
| For the first child raised by a couple | ISK 248 000 per year (approx. EUR 1652) |
| For each subsequent child raised by a couple | ISK 295 000 per year (approx. EUR 1965) |
| For the first child raised by a single parent | ISK 413 000 per year (approx. EUR 2751) |
| For each subsequent child raised by a single parent | ISK 423 000 per year (approx. EUR 2818) |
HOW TO APPLY FOR THE FAMILY ALLOWANCE?
An application for the family allowance for the child / children (RSK 3.20 or E-411 form), must be submitted to the Icelandic Tax Office – Ríkisskattstjóri. The document should contain the following information:
- name and surname of the applicant;
- address of residence (in Iceland and in the country of origin);
- spouse’s details (name, surname, address);
- personal data of the children (names, surnames and dates of birth);
- information on child allowances received in the country of residence;
- the applicant’s and spouse’s statement of income in the home country.
In the case of foreigners, the amount of the allowance is calculated individually on the basis of income and other allowances received in the country of origin.
Unemployment allowance
People with a permanent residence permit in Iceland, aged between 16 and 70, can apply for unemployment allowance after having worked for a certain period. It is paid for a maximum of 2.5 years. To receive this type of allowance, you must:
- register with the Icelandic Employment Office (Vinnumalastofnun);
- demonstrate willingness and readiness to take up a job;
- make every effort to find employment in Iceland.
An unemployed person coming from another EU country to Iceland to find a job, may also receive unemployment allowance (paid for a maximum period of 3 months). It is then possible to transfer unemployment allowance from the home country to Iceland. The condition is an entry in the registry at the employment office, valid for at least 4 weeks from the loss of employment and possession of the U2 form. Apart from that, immediately after arriving in Iceland (up to the 7th day of your stay), you must register with the Icelandic Employment Office as a job seeker.
Important! People who are studying in Iceland or starting a business on the island, cannot apply for the unemployment allowance.
The amount of the unemployment allowance depends on the length of time appropriate for the previous employment. The values might look like this:
| Working time | Value of the allowance |
| full-time | ISK 307 430 gross/month (approx. EUR 2048) |
| ¾ full-time | ISK 230 572 gross/month (approx. EUR 1536) |
| ½ full time | ISK 153 715 gross/month (approx. EUR 1024) |
| ¼ full-time | ISK 76 857 gross/month (approx. EUR 512) |
More information on unemployment benefits in Iceland can be found at http://www.vinnumalastofnun.is/
Other social benefits in Iceland
In the table below we have provided information on other social benefits in Iceland. Check what extra help you can get from the Icelandic state!
| Types of social allowances | Description |
Help in a difficult life and financial situation | It is the municipality’s responsibility to provide assistance to people in need. It is enough to have a permanent place of residence in Iceland, to be able to take advantage of help in the form of advice, various services and grants. Icelandic Red Cross (food and material goods). Family support (food parcels for needy families). |
Apartment allowance | Coverage of part of the costs of an apartment rent (does not apply to employee hotels or boarding houses). More at: http://eng.velferdarraduneyti.is/ |
Rehabilitation benefit | Is granted to persons unable to work due to illness or accident. A person aged 18 to 67 registered in Iceland, can apply for this type of benefit. Anticipates for various entitlements and supplements (determined individually) aiming to restore physical fitness through rehabilitation, so that the person can take up a job in the future. |
We described the subject of retirement benefits in more detail in our previous article. Check → Retirement in Iceland.
