Unemployment benefit in the Faroe Islands

Færøske regler for arbejdsløshedsforsikring og arbejdsanvisning
Here you can read about the Faroese rules for unemployment insurance and unemployment benefit

If you become unemployed, you may be entitled to unemployment benefit. A requirement for this is that you are covered by unemployment insurance. In some Nordic countries this happens automatically when you work, while in others you have to register with an unemployment insurance fund. If you have lived in one Nordic country and worked in another, or if you move between two Nordic countries, you should pay special attention to what rules apply.


Faroese rules for job placement (job centre) – ALS

The Faroese unemployment insurance fund is called Arbeiðsloysisskipanin, abbreviated ALS, which is also the Faroese employment service. All working persons aged between 16 and 67 are compulsory members of this fund by virtue of being employees.

All employers who pay wages, and all employees aged between 16 and 67 who are fully taxable in the Faroe Islands, automatically pay 1.25% of the paid or received wages into the fund. The membership fee is automatically deducted from wages, and taxes and ALS contributions are paid via the tax system.

Foreigners with fixed-term work and residence permits are also liable to pay, but may apply for an exemption from paying into the unemployment insurance fund for one year at a time.

Self-employed persons can take out unemployment insurance.

For persons employed on shore by the fishing industry, there is a special scheme that employees can associate with ALS.

ALS includes an unemployment insurance fund and a job placement system/job centre. The whole of the Faroe Islands is regarded as a single labour market with respect to the requirement to be available for employment, in any work for which you have professional competence or in which an employer wishes to employ you.


ALS also administers the activation of the unemployed. 

Unemployment benefits are calculated on the basis of the previous twelve months of wages prior to unemployment. The daily benefit amount is calculated as 75% of the past twelve months of paid wages, divided by 253 (the number of paid days per year – unemployment benefit is not paid for Saturdays, Sundays or public holidays). The maximum benefit rate is DKK 210,000 per year, which is DKK 17,500 per month.

Unemployment benefit is paid for five working days in a 40-hour week. For employees in the fishing industry, a maximum of 32 hours is paid per week.

When am I entitled to unemployment benefit?

If you become unemployed, you must inform ALS and fill in a four-page application form, in which you must answer questions relating to the cause of unemployment, your education, work experience, job wishes, etc.

You are required to be available for the labour market, and there are no professional or geographical limitations on the work you may be offered.

If you say no to a job with which you have been matched by the job centre or an employer, you may be given quarantine for four weeks, eight weeks, twelve weeks and six months, respectively.

How long can I receive unemployment benefit?

Unemployment benefit may be paid for 648 days over a period of four years, after which time you will not be entitled to unemployment benefit for a period of 24 months. After the 24 months you can apply for unemployment benefits again, under the same conditions as when you applied for the first time.

Taking your unemployment insurance with you to the Faroe Islands

If you move from another Nordic country to the Faroe Islands, the period during which you have paid in to an unemployment insurance fund may be transferred to the Faroese unemployment insurance. Contact your unemployment insurance fund for more information.

If you travel to the Faroe Islands to seek work, you will usually be able to take your unemployment benefit with you from your former country of residence for a period of up to three months. Contact your unemployment insurance fund before you travel for more information.

Taking your unemployment insurance with you from the Faroe Islands

If you move from the Faroe Islands to another Nordic country, you must contact ALS to obtain documentation of your membership and for necessary guidance concerning the rules of the other Nordic country on unemployment insurance, and what you will need to do in connection with transferral of your unemployment fund membership.  

The documentation is called a PDU1 certificate. This will be sent to you together with print-outs from TAKS (your salary information).

You will need the certificate and the print-outs when transferring your membership of the unemployment insurance fund to your new country. You may also need pay slips from your previous employer(s). You should apply for admission to your new unemployment insurance fund immediately, as there are deadlines and rules on unemployment benefit that you must meet in order to be entitled to receive unemployment benefit. These requirements are different in the various Nordic countries. You can inquire about this in the country to which you are moving.

You can travel to the other Nordic countries to seek work and keep your Faroese unemployment benefit for a period of up to three months. Contact ALS before you travel for more information.

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