Rights and Obligations
What do you need to know?
Unemployement Insurance – general information
Rights and Obligations.
Introduction to Available Services
Labour market training programs.
Vinnumálastofnun - VMST
The Directorate of Labour
Appertains to the Ministry of Welfare
In charge of national employment agency and unemployment
insurance fund service.
Operates according to legislation:
Act No. 54/2006 on Unemployment Insurance.
Act No. 55/2006 on Labour Market Measures.
• To provide individuals with appropriate assistance with being active
participants in the labour market.
• To promote a balance between the supply and demand of labour in
Registration – Employment Services - Counselling
Reception and registration of employment and unemployment benefit
applications, certificates and other supporting documents.
Provide information regarding available employment and
job-related labour market training programs.
Provide information and counselling to job-seekers.
Benefit Entitlement Rulings
Application processing and benefit entitlement rulings from the Payment
Office may take up to six weeks from the date of reception of all required
documents. It is therefore important to submit all required
documentation as quickly as possible.
Information regarding your application's status can be found in ‘Mínar
Mínar síður (e. my pages)/umsóknir (e. applications)/ staða umsóknar (e. application status)
Mínar síður (e. My Pages)
• Electronic Documents (ísl. Rafræn skjöl)
Payslips (unemployment benefit calculations)
• Applications (ísl. Umsóknir)
Application for unemployment benefits and job-search registration
• Actions (ísl. Aðgerðir)
Registration as a job-seeker, without benfit claim
De-registraton from unemployment registry
Report employment and income
Change personal tax-credit information
Change personal information
Mínar síður – Aðgerðir – Breyta persónuafslætti
Mínar síður – Actions – Change personal tax-credits
Mínar síður – Aðgerðir – Breyta persónuupplýsingum
Mínar síður – Actions – Change personal information
It is important to have a CV during your job-search. In order to be of use to VMST‘s
employment center, it is necessary to attach your CV to your application as soon as it
is complete. You are able to amend it at a later time via ‘Minar Síður’.
Entitlement to Unemployment Benefits
Wage-earners aged between 18 and 70 years old with their legal domicile
registered in Iceland.
Job-seekers must be situated in Iceland to be entitled to benefit payments for
the registered job-seeking period.
Requirements of active job-search:
Be fit to work in most general employment. A doctor‘s certificate must be
submitted if your ability to work is imapaired.
Initiative for job-search and willingness to accept employment in Iceland
which is paid according to legislation and collective agreements.
Willing and able to participate in programs per Labour Market Measures
The benefit entitlement period is 30 months.
Basic unemployment benefits
are kr. 227.417 per month for full (100%) entitlement.
Income-related unemployment benefits
Income-related benefits are paid for three months, commencing half a month
after the benefit entitlement period begins. Basic benefits are therefore paid
for the first half-month.
Wage-earner 70% of the average wages earned in the six month period, two months
before the applicant became unemployed.
Self-employed 70% of the average wages for the last pay-year period.
Maximum income-related benefits: kr. 358.516 per month.
Child supplement: kr. 9.097 per month for each dependant child under the
age of 18 years old is supplemented to the benefit
payment, regardless of benefit entitlement proportion.
Unemployment Benefit Payments
Unemployment benefits are paid on the first weekday of each month.
The pay-period is from the 1st until the 31st of each month. Each month is
paid separately and is for the previous month.
All illness which hinders your job-search must be reported to the directorate.
Job-seekers are entitled to 5 days of paid sick-days in each 12-month period, although only
after 5 months of the benefit entitlement period has been used. Paid sick-day periods can
only be taken in two separate periods.
• Unemployment benefits are not paid to job-seekers who are situated
• All international travel and request for vacation registration must be
reported to the directorate before departure.
(Mínar síður-Aðgerðir-Tilkynna orlof)
(Mínar síður – Actions – Report Vacation)
Confirmation of Job-search
Job-search confirmation is made via VMST’s website / ‘Mínar síður’
Job-search must be confirmed between the 20th and 25th of each month while
registered as a job-seeker.
Should you forget to confirm your job-search within the designated period you
are still able to confirm between the 26th and the 3rd of the next month,
however your benefit payment will then be delayed for 5 working days.
Failure to confirm your job-search will result in de-registration
Confirmation of Job-search
When your job-search
has been confirmed,
you will received a
confirmation via e-mail.
If you don‘t receive an
e-mail please contact
VMST‘s nearest service
in Iceland and Europe
• Information about available employment in Iceland is
available at www.vinnumalastofnun.is
• Links to other recruitment agencies available at VMST’s
website (Job search/Other recruitment agencies)
• European jobs network portal www.eures.europa.eu
• Job-brokers and Counsellors provide further information and
assistance with seeking employment.
Job Seeking in Europe
• Provides those who have a confirmed entitlement to unemployment
benefits, permission to seek employment in Europe for up to three
months while receiving unemployment benefit payments from Iceland.
• Application processing time is 3-4 weeks.
• Further information is available at the VMST service centers.
International travel is not permitted while registered as a job-seeker and
receiving unemployment benefits unless a U-2 certificate has been issued.
Eures – European job network
Information and advice about seeking employment in Europe.
• Information regarding the correct employment ratio and job-search ratio to be
changed via ‘Mínar síður’. Estimated part-time income is also to be reported via
(Aðgerðir-Tilkynna um vinnu og tekjur-Tilkynna um hlutastarf)
(Actions – Report employment and income – Report part-time employment)
• Incidental employment must be reported to VMST in advance, with at least one
day notice via ‘Mínar síður’.
(Aðgerðir – Tilkynna um tilfallandi vinnu)
(Actions – Report incidental employment)
Reports can be sent on the same day under special circumstances
Applies to all incidental employment, regardless of length, time or income.
Incidental Employment -
Income Allowance Threshold
The income allowance threshold from incidental
employment is kr. 66.459 per month.
Example: Total income: kr. 96.459
Income threshold: kr. 66.459
Income exceeding threshold: kr. 20.000
When information regarding the income amount is obtained from the tax
authorities two months later, half of the income exceeding the threshold is
deducted from the benefit calculation.
The deductions due to income are in this instance kr. 15.000
Reporting Employment and Income
All income, grants and allowances must be reported to VMST via ‘Mínar síður’
• Open wage-payer registries are not permitted while
receiving unemployment benefits.
• Individuals are not permitted to be self-employed
and receive unemployment benefits at the same
Job-seekers intending to work freelance projects on their own ID No. must
register as ‘not unemployed’ for the duration of the project. All freelance
projects must be reported to the directorate in advance.
(Aðgerðir/Tilkynna um vinnu og tekjur/Tilkynna verktakavinnu).
(Actions/Report employmet and income/Report self-employment)
All changes to your personal circumstances which may affect
your job-search must be reported to VMST, such as:
Home address, phone number, e-mail address.
Employment (incidental, part-time or full-time).
Other income (i.e. salary, pension, capital income, grants such as recreational grants and
Participation in studies while seeking employment.
Vacations and international travel without a U-2 certificate.
Illness which hinders an active job-search.
Work capacity (depleted or complete incapacity).
Failure to report may lead to temporary suspension of benefits or other
Suspension period / Sanctions: Unemployment benefits are not paid for the duration of the suspension period. To
complete the suspension period, the job-seeker must continue to actively seek employment, fulfill their duties
according VMST and confirm their job-search each month.
Obligation to Report
Suspension Periods and Sanctions
Suspension periods or sanctions could be acquired in the following instances:
Resignation from employment.
Termination from employment due to own actions.
Withdrawal from studies before they are completed.
Decline to participate in labour market measures or minimum attendance not
Undertaking studies without applying for a study agreement.
Failure to report information about employment, income, international travel
or change of contact information (home address, phone, or e-mail).
All matters are directed to the Payment Office and a written explanation is
requested before they are ruled upon.
Sanctioned job-seekers who have received unemployment benefits for 24 months or longer, are not entitled
to receive unemployment benefits again until they have worked in Iceland contiguously for at least 24
months and their benefit entitlement period has been renewed.
Labour Market Measures
Labour market measures available:
Job-related training, courses, educational resources, employment-related
rehabilitation and counselling.
Enable job-seekers to remain active.
Promote connections in the labour market.
Refresher courses and training – maintain and gain new skills.
Job-related Labour Market Measures
Workplace training (max. 8 weeks)
Professional training (up to 6 months)
Labour training (i.e. Fjölsmiðjan)
Special campaigns (up to 6 months)
Entrepreneurships at companies or directorates (up to 6 months)
Innovations (previously ‘Development of own business ideas’) (up to 6 months)
Further information is available at VMST’s website www.vinnumalastofnun.is
Unemployment Benefits and Study
Generally, studying while seeking employment and receiving unemployment
benefits is not permitted. However, if certain conditions are fulfilled you may be
permitted to study while seeking employment. Such studies must be approved by
VMST and fulfill conditions according to regulation No. 1223/2015 and a study
agreement must be entered into.
(see: https://vinnumalastofnun.is/en/unemployment-benefits/counselling/job-training-and-learning- opportunities)
• Criteria for studying while seeking employment:
• Daytime study at a secondary school level is not permitted while seeking employment and receiving benefits.
• Permission to enter into a study agreement may be granted if certain conditions are fulfilled and after consulting
with a Student and Careers Counsellor. However, only up to a 33% study ratio and only during evenings or via
distance learning at a secondary school level.
• Study agreements can be entered into for study at university level of up to 10 ECTS credits. Study beyond 10 ECTS
credits will deplete benefits proportionately.
Further information is available at the VMST website or from a Student and Careers Counsellor.
Courses and Study Grants
Organised by VMST and are offered to job-seekers who have a confirmed
entitlement to unemployment benefits, free of charge. For further information please
contact a Counsellor or visit VMST‘s website.
Payments to subsidise fees for courses which are not organised by VMST.
Subsidies are only granted to job-seekers who have a confirmed entitlement to
unemployment benefits and for courses which increase employability.
Up to 50% of the course fees can be subsidised, with a maximum of kr.
70.000 per year.
• Applications for study grants are to be submitted to a Counsellor. (forms available at
All relevant information regarding the course should accompany the application.
• Applications must be submitted before the course commences.
Other Grants and Discounts
Grants can be provided due to relocation in Iceland should your legal
domicile require you to relocate in order to commence permanent
employment for a new employer. All invoices for expenses pertaining to
your relocation must accompany the application.
offer a wide range of services to their members who have lost their
employment and are being paid unemployment benefits from VMST.
Job-seekers may choose if they would like to continue to pay their union fees after they have
registered as a job-seeker at VMST. Continued payments will maintain all accumulated rights.
Some municipalities offer perquisites to job-seekers, such as free access to swimming pools. Job-
seekers are advised to seek information from their local municipality.
Résumé (CV) and letter of introduction
Instructions on creating a CV and letter of introduction can be found at VMST‘s website.
Counsellors are also available to assist if requested.
Use the same approach in your job-search as you would at work
with certain projects each day/week.
Use various methods and activate your connections and networks.
Preferably in writing, i.e one week at a time.
Hold summaries of your activities:
Jobs which you have been applied for, answers you have received from applications, attended job
interviews, etc. It is also recommended that to have an overview of inquires made regarding
employment and informal applications, contact people within your networks and
communications with them. (See example of summary sheet on slide No. 32)
Letter of Introduction and Follow-up
Letter of Introduction
Is a letter sent when applying for employment. It connects you to your
application for a certain job, gives a better image of who you are and what you
are aiming for in employment. The letter of introduction should state the reason
for applying and how your skills and experience can be utilised in the position
you are applying for. Your CV should accompany the letter, as an attachment if
sending via e-mail. Letters of introduction shouldn‘t be too long (max. one page).
It is important to follow up on submitted applications which have not been
responded to shortly after the application deadline has expired. This can be done
either by calling or sending an e-mail to inquire the status of hiring in the
Job-search: Example of Summary Sheet
Remember to follow up applications via phone or e-mail.