Recalculation and settlement of benefits for 2009

As provided for in the Social Security Act, Tryggingastofnun pays benefits to pension recipients each month based on the estimated annual income of each individual. When complete information about the previous year's income is available, Tryggingastofnun will recalculate benefit entitlements based on the actual income. If the recalculation shows that there is a difference between the benefit payments and the actual benefit entitlement, then a settlement of benefits will be made whereby benefit amounts will be corrected.

This involves recalculating the basic pension, income supplement, single-person household supplement, age-related invalidity pension supplement, holiday supplement, December supplement and the contribution for residential admission.

This means that if a pension recipient has received payments during the year which are too low e.g. because the income estimate had anticipated a higher income than the actual income, then the recipient will receive a payment of the deficit sum. Before the social security balance is paid out, any earlier debts accrued by the pension recipient with Tryggingastofnun will be paid off. If on the other hand the benefit recipient has received excess payments, such as because his/her annual income turned out to be higher than anticipated or if Tryggingastofnun has for some reason not been notified of a change in income or in the income structure, the excess payment will be collected.

The tables show the different weighting of income on the payment of pension entitlements and benefits.

• Payment types for social security pension from January 2009
  

Explanatory notes to the settlement of benefits

Social security balance:

• Tryggingastofnun will pay out social security credit to those pension recipients whose social security account is in credit by 6^th of August.

Repayment:

•  As a principle, pension recipients must repay excess pension benefits and associated benefits within a period of 12 months from the time when the claim accrued. Pension recipients who find it difficult to make the payment within this time frame may negotiate to spread repayment over a longer period When evaluating such a request, information concerning total income, asset position and other circumstances will be taken into account.

Income averaging

• It should be noted that it is permitted to average payments originating from financial income over a period of 10 years provided that the income was received as a lump sum.

Objection

• The time limit for submitting an objection to a recalculation expires on 26 August 2010. The objection must be made by completing a special form.

Forms:

• Request for income averaging of financial income
• Request for automatic bill payments
• Request for a deduction from benefits
• Objection form