Persons between the ages of 18 and 67 years can apply to the Social Insurance Administration (Tryggingastofnun) for disability assessment, i.e. an assessment of their ability following illness or due to handicap. Application can be made to Icelandic Health Insurance for disability assessment for accident insurance of social insurance.

Individuals’ entitlement is based on their residence in Iceland from 16-67 years of age. The person must have lived in Iceland for at least the three years preceding application. The same applies to residence in another Nordic country under the Nordic countries’ agreement on social insurance. The person must have been resident in Iceland for at least one year after age 16. Full payment is based on 40 years of residence in Iceland.

An application must be accompanied by a medical certificate and completed self-assessment questionnaire on the person’s state of health.

The person must provide an estimate of income, on which payments are calculated. Payments are recalculated annually once the person’s tax return is available.

Confirmation must also be provided that the person has applied for payments from a pension fund. Disability assessment generally applies for a limited period. Application can be made for an extension when the period expires.
The basic disability pension payments are disability pension, age-related disability supplement (the amount is higher the younger the age at which the person began receiving benefits) and guaranteed income.

Payments are income-linked and are cancelled if income exceeds a certain threshold.

Frequently asked questions

If you live in Iceland: 

You must apply to the Social Administration (Tryggingastofnun) for Icelandic disability pension. 

If you live in another Nordic country and were previously insured in Iceland: 

Persons who live abroad and are applying for a disability pension must contact the equivalent security authority in that country. 

Because social insurance systems differ in nature between countries, disability assessment can vary and benefits may not be available between countries. Payments from foreign pension funds have the same effect in reducing pension payments as do payments from Icelandic pension funds.

Can you transfer an Icelandic disability pension to another Nordic country?

When persons move to another Nordic country, as a general rule the person receiving a disability pension retains basic payments from Iceland, i.e. disability pension, age-related disability supplement and guaranteed income, as well as child’s pension, if applicable. Payments requiring legal domicile in Iceland, such as household allowance and minimum income supplement, are not transferable between countries. Payments from pension funds are generally transferable, but it is a good idea to check with the pension fund or funds concerned.

An individual receiving a disability pension may have paid employment, but income exceeding certain limits reduces pension payments by a specific proportion. Information on how much you can earn per month/year without reducing your pension payments is available on the Social Insurance Administration (Tryggingastofnun) website.

The entitlement to disability pension ends at the time of death. Upon a person's death his/her estate becomes an independent legal person, which temporarily acquires all the rights and obligations of the deceased. The rights and obligations of the estate and the person's heirs towards the Social Insurance Administration depend on the probate of the estate.

Further information on the taxation of pensions in the Nordic countries can be found on the Nordic tax portal Nordisk eTax.