Parental benefit in Iceland

Íslenskar fæðingarorlofsgreiðslur
Here you can find information about parental leave, how long parental leave can be and how to apply for payments during parental leave.

Leave in connection with pregnancy, after childbirth and in connection with adoption

The parents of a child are entitled to paid leave at childbirth, when adopting a child and when becoming permanent foster parents Parents receive either leave payments or a childbirth grant from the Parental Leave Fund, depending on their labour market situation. Parents can also take temporary parental leave without salary up until the child reaches 8 years of age.

Changes to parental leave took effect in Iceland on 1 January 2021. The main change is that maternity leave is extended from 10 months to 12 for children who are born, adopted or taken into permanent foster care from 1 January 2021. The independent entitlement of each parent is six months. However, each parent may transfer one month to the other parent, which means that one parent can take seven months paternal leave and the other five. Additional authorisations were provided for the transfer of entitlement between parents when one parent cannot, for certain specified reasons, utilise his/her right to parental leave. Provision was also made for a special grant to a pregnant woman in connection with limited access to maternity services in cases where, in the assessment of a specialist physician, she must reside far from her home prior to giving birth, to obtain necessary services in connection with giving birth. 

Parents in the domestic labour market who are employed or self-employed and had a child in 2019 or earlier each have an independent right to up to 3 months parental leave in connection with the birth, primary adoption or placement of a child in permanent foster care. This right is not transferable. In addition, parents are entitled to an additional three months which they can divide between them. Those parents who have a child in 2020, on the other hand, have an independent right ot up to 4 months each and an additional 2 months jointly.

Parents may begin their parental leave up to one month before the estimated date of birth of a child. They are always entitled to take parental leave in a single, continuous period; in other respects, the employer and employee can reach agreement on the arrangements for parental leave. The leave may not, however, be taken in shorter periods than two weeks at a time. The law requires the mother to be on leave for the first two weeks following childbirth. 

    How to apply for parental leave payments

    Parents in the labour market must apply for payments six weeks before the expected date of birth. Parents in full-time study or not active in the labour market must apply for a childbirth grant three weeks before the expected date of birth.

    Application for parental leave is made to the Parental Leave Fund (Fæðingarorlofssjóður).


    Payments during parental leave

    Parents are entitled to payment from the Parental Leave Fund after having been in continuous employment for six months in the domestic labour market prior to the birth of the child or the date the parent begins parental leave before the date of birth of a child.

    A parent who has worked in another EEA country for part of the above-mentioned six-month period can transfer the entitlement between countries if he/she commences employment in the Icelandic labour market within 10 working days of leaving employment in another EEA country and works for at least one month before the birth date of the child in Iceland. The parent must provide the required certificates verifying working periods and periods of insurance in another EEA state with an application for payments from the Parental Leave Fund. Calculation of payments is, however, based solely on wages in the domestic labour market.

    The person must have worked in at least 25% of a full-time position each month. Payments amount to 80% of the parent's average total salary.

    This is based on a period of twelve consecutive months, concluding six months prior to the month of the child's birth. However, payments may never exceed a certain maximum or fall below the minimum amount currently applicable.

    Entitlement to parental leave expires when the child is 24 months old. Application for payments must be made to the Parental Leave Fund six weeks before the estimated date of birth.

    Parental leave payments are paid at the end of the month for the previous month of parental leave.

    Moving to another Nordic country before or during parental leave

    As a general rule, parents earn entitlement to parental leave in the country in which they work.

      Are parental leave payments available if a parent moves to Iceland after beginning parental leave?

      If a parent has moved to Iceland after the birth of a child, the parent is not entitled to Icelandic parental leave, but if the parent has moved to Iceland before the child’s birth he/she may be entitled to payments from the Parental Leave Fund or to a childbirth grant, if specific conditions are satisfied.

      For more information see the website of the Parental Leave Fund (Fæðingarorlofssjóður). 

      Is Icelandic parental leave available if a parent moves to Iceland after the leave begins?

      A parent moving to Iceland after beginning parental leave must apply to continue parental leave payments from their previous state. Parents must contact the relevant administrative authority in the country which they are leaving to obtain information on how to receive parental leave payments when they are resident abroad.

      Can Icelandic parental leave entitlement be transferred when moving to another Nordic country after leave begins?

      If a parent transfers his/her domicile to another country during parental leave this does not affect the payments to the parent, as they are an earned entitlement. However, a parent is not permitted to work during the leave period unless he/she postpones taking parental leave in consultation with the Parental Leave Fund.

      Parental leave when the family lives in Iceland but one or both parents work in another Nordic country

      As a general rule parental leave payments are paid by the country in which the person is covered by social insurance. If a person works in another Nordic country but lives in Iceland, the parental leave payments are to come from the country of employment. A person who works and lives in one country but also works in another country continues to be covered by the social insurance and law of the country of residence.

      Parents who each work in a different country are entitled to parental leave in accordance with the rules applicable in each of their countries of employment. 

        Temporary parental leave

        In addition to parental leave at the birth of a child, each parent is entitled to take unpaid leave, referred to as temporary parental leave, for up to 16 weeks until a child reaches eight years of age. No payments are made during temporary parental leave and parents cannot transfer rights between themselves. 

        Childbirth grant

        Parents who are not in the labour market or in less than 25% of a full-time position may be entitled to a childbirth grant. The requirements for payment are usually that a parent must be domiciled in Iceland when the child is born and must have been for the last twelve months preceding the birth. Entitlement to a childbirth grant expires when the child is 24 months old. Application for a childbirth grant must be made no later than three weeks before the estimated date of birth.

        Students who have been in full-time study for at least 6 of the past 12 months prior to the birth of a child and satisfied requirements for study progress during that time are entitled to a childbirth grant. 

        Who should I contact if I have questions?

        More information can be found on the website of the Parental Leave Fund. You can also obtain information by telephone at +354 515 4800. 

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