Parental Payments

Parental payments are payments to parents of chronically ill or severely disabled children. The purpose is to provide parents with financial assistance when they are unable to work or study due to their child's illness or disability. This is a shared entitlement between both parents. Parent and child must have a legal domicile registered in Iceland during the payment period. Assessment can be a maximum of one year.

The main conditions for parental payments according to Act no. 22/2006 are that:

  • A child cannot be placed in public care, e.g. kindergarten or school
  • A parent is not entitled to payments from a union's sickness fund, unemployment benefits, maternity/paternity leave or grant, and is not receiving pension from TR
  • A child's problems must meet certain disability and illness conditions

Parental payments are divided into three payment categories and different rules apply for each category:

  • Payments to parents in the labor market / Wage-related payments
  • Payments to parents engaged in studies
  • General financial assistance / Basic payments

Applications for parental payments are made on My Pages.

Documents supporting the application

  • Medical certificate, issued by a doctor that provides medical care for the child, stating child's diagnosis, treatment and level of care needed
  • A statement from a professional, e.g. social worker
  • Confirmation from union's sickness fund that entitlement has been exhausted
  • Parents in the labor market must submit a confirmation from employer that the parent has quit their job and that full salary payments are no longer being made. Additionally, a confirmation on period of employment and employment percentage. Self-employed persons must submit a confirmation from the Directorate of Revenue and Customs that presumptive employment income (reiknað endurgjald) has been suspended
  • In certain cases, a confirmation from the Maternity/Paternity Leave Fund or the Directorate of Labour must be submitted
  • Students must submit a certificate from the school stating that the parent has taken a break from studies, as well as a certificate of previous study periods
  • Income estimate

Apply at My Pages

Parent engaged in studies may be entitled to payments, for up to three months, if the study is interrupted due to a serious illness or disability of a child.

  • Parent must have been enrolled in 75-100% studies for at least 6 out the 12 months before the child was diagnosed, as well as have had legal domicile in Iceland for that period
  • Parent must take a break from studies for one semester or longer, at the school in question, to take care of the child
  • Payments are made after the semester of the school in question is over and it is confirmed that the parent has taken a break from studies

Upon the death of a child, payments may be continued for up to one month from the time of death, if that period has previously been approved.

Frequently Asked Questions

Basic payments are payments made to parents who are neither studying nor working when a child is diagnosed. They can also be made as a follow-up to wage-related payments or payments to parents engaged in studies.

  • If a parent receives basic payments, child benefits are also paid for each child in the household under the age of 18
  • If a single parent has two or more dependent children, special additional payments are made on their account
  • A parent can keep payments for up to three months after the recovery of a child who has been ill for more than two years
  • Upon the death of a child, payments may continue for up to three months

A parent who has been on the labor market may be entitled to wage-related payments, for up to 6 months, if work is terminated due to a serious illness or disability of a child.

  • A parent must have been a part of the domestic labor market for 6 consecutive months and have quit for 14 days or more
  • Parent must have been employed in a 25% job percentage at minimum. Employment percentage of self-employed persons is based on the payment of social security tax (tryggingagjald)
  • Parent must have fully exhausted their right with the employer and the union's sickness fund
  • Payments are 80% of average wages over a 12-month period, which ends two months before the date of the child's diagnosis
  • Parent may be entitled to proportional payments if the parent lowers their employment percentage due to the child's illness, or returns to work part-time after the child's illness
  • Parent pays a minimum of 4% is paid into a pension fund and the Treasury pays a counter-contribution of 8%
  • Parent can request to pay into a private pension fund and a trade union

Upon the death of a child, payments may be continued for up to one month from the time of death, if that period has previously been approved.

Parent who has custody or joint custody of a child may be entitled to payments. The same applies for spouse/cohabiting spouse/cohabiting spouse of a parent who has custody, if both biological parents consent and the marriage/cohabitation has lasted for more than one year.

Both parents are not entitled to payments at the same time except when the child in question is receiving palliative care.

Parental payments are income-related and are paid at the end of the month. It varies whether payments are related to work, studies or are basic payments. Parent who has been on the labor market the last year may receive 80% of their wages, but basic payments and payments related to studies are not calculated on the basis of employment income in this way.

Payments are taxable.

Amounts below are monthly payments before tax:

  • Maximum amount of wage-related payments is up to ISK 892.826
  • Payments to parents engaged in studies: ISK 261.951
  • Basic payments: ISK 261.951
  • Child benefits: ISK 38.540
  • Special child allowance (2 children): ISK 11.158
  • Special child allowance (3 children): ISK 29.009
  • Income up to ISK 90.271 does not affect the calculation of parental payments