Your unemployment benefits are reduced in the case of working alongside benefits part-time or incidental work (note that all work must be notified on My pages), receiving pension and disability payments and capital income.  

The income threshold is ISK 73.827 . If income exceeds the threshold, benefits are reduced by half of the exceeding amount.  


Part-time employment:

Benefits are reduced by the employment rate and by half of the combined income (part-time work and unemployment benefits) which exceeds the unreduced right to the benefits plus the income threshold.  

Incidental employment:

Benefits are reduced by half of the combined income exceeding the unreduced right to the benefits plus the income threshold.  

Pension and disability payments:

Benefits are reduced by half of the combined income exceeding the unreduced right to the benefits plus the income threshold.  

Payment from labour union sickness funds due to partial incapacity to work:

Benefits are reduced by the proportion of incapacity to work according to a medical certificate and half of the combined income exceeding the unreduced right to the benefits plus the income threshold.  

Capital income:

Benefits are reduced by half of the combined income exceeding the unreduced right to the benefits plus the income threshold. 

Contractual work:

Benefits are reduced by those days you work as a contractor.  

Unemployment benefits are not reduced due to the following income: 

Childcare benefits 

Grants from labour unions that are not intended for the support of the insured. (Grants for fitness, courses etc.) 

Grants from public funds intended for the development of a business idea. 

Private pension savings. 

Inheritance. 

Accident and/or sickness benefits for accidents or illness during a period in which the applicant did not receive unemployment benefits.  

Social grants from municipalities.  

Child support payments. 

Child pension. 

Other payments paid for periods for which the applicant did not receive unemployment benefits.  

Unemployment benefits are not paid in parallel with the following payments:

ehabilitation pension. 

Parental benefits for chronically ill and severely disabled children.  

Accident benefits. 

Sickness benefits. 

Maternity / paternity leave payments.  

Payments for vacation or retirement from previous employer.  

Student loans.  


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