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Pension Rights of Immigrants / Foreigners

Pension rights abroad

Those having lived or worked abroad could be entitled to pension rights in the relevant country. Whether or how such rights benefit individuals residing in Iceland and those surviving them depend on how agreements made between states cover pension insurance. When international agreements are in force, the Social Insurance Administration acts as liaison for applications and the acquisition of information from foreign institutions.

Old age pensions

To have a right to an old age pension, residence in Iceland must be shown for at least three calendar years between 16-67 years of age. Old age pensions are paid as a proportion of the period of residence between 16 and 67 years of age. A couple's residence ratio may be based on the spouse with a longer rights period. If a pensioner has lived a total of 40 years in Iceland between 16-67 years of age, a full pension is paid.

Example:  

An individual lived abroad for 20 years between 16-67 years of age. The period between 16-67 years of age is 51 years. The person has then lived in Iceland for 31 years of the 51-year period. 31 years is divided by 40 years, giving a residence right in Iceland of 77.5%. The person therefore gets 77.5% of the full pension payments to which he or she would otherwise be entitled.

Invalidity pensions

To be entitled to invalidity pension payments, residence in Iceland must be shown for at least the last three years before the application is submitted.  If work capacity was undiminished at the beginning of residence in Iceland, the person involved will have to have lived in the country the last six months before the application was submitted. The rights depend on whether the applicant has lived or worked in another country and become entitled to pension rights there.

Invalidity allowance

The same rules regarding proportional reduction because of residence apply to an invalidity allowance as to a invalidity pension.

Child pension

To be entitled to child pension payments, one of the child's parents or the child has to have lived in Iceland for at least the three years preceding submission of the application.  A child pension is not linked to income and is therefore not reduced in accordance with residence rights.

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