Pension insurance

Main categories of the social insurance’s pension insurance are:

Old age pension

To be entitled to a pension, the person in question shall be aged 67 or older and shall have lived on Iceland for at least 3 calendar years between the ages of 16-67. Old age pension is payable from the age of 67. Residence on Iceland for 40 years between the ages of 16-67 entitles a person to a full pension whereas a shorter period of residence reduces the pension proportionally. The pension amount is therefore dependent on the duration of residence. The pension amount is set out in law but the pensioner’s income influences the amount.

Income insurance

Income insurance is paid to persons whose income is below a given limit.

Household supplement

A household supplement can be granted to single old age and disability pensioners who are sole occupants of a household.

Early retirement pension

An early retirement pension is paid if the level of disability is assessed to be 75% in the long term as a consequence of medically-recognised illness or disability. The amount of the pension depends on how long the pensioner has lived on Iceland and the person’s income. The principal condition is that the person concerned has a degree of disability that is at least 75%, is aged between 16 and 67, and has lived on Iceland for at least the last three years before an application is submitted.

Different supplements

Pension supplements can be granted if, for example, a pensioner pays a high price for medicine, needs care from other people, has cohabitation costs etc. A criterion is that income or wealth shall be less than a given amount.

Rehabilitation pension

A rehabilitation pension can be granted if the degree of permanent disability after illness or an accident is unclear. The criteria include the patient getting a recognised diagnosis or undergoing treatment at or outside a care institution, is aged between 16-67, is registered for census purposes on Iceland, and is entitled to a daily allowance by sickness or accident.

Invalidity allowance

An invalidity benefit can be granted to a person who is aged 16-67 and, according to the insurance doctor’s assessment, has lost 50-74% of his/her capacity to work.

 Child pension

A child pension is paid to a child below the age of 18 if one parent has died or receives an invalidity or rehabilitation pension [örorku- eða endurhæfingarlífeyris]. A double child pension is paid to children if both parents have died or receive invalidity pensions. The child or one of the parents shall have been registered for census purposes on Iceland for at least the last three years before an application is submitted.

Payments from statutory pension funds

All wage-earners and self-employed persons from the age of 16 to the age of 70 are responsible for insuring their own pension entitlement by paying premiums to a pension fund. The respective pension fund will pay old age, invalidity and survivor pensions to those who have paid their premiums to the fund if all conditions are met..