A rehabilitation pension is intended for persons who are unable to work due to illness or injury and are undergoing rehabilitation with the aim of returning to the labour market.

Arrangements for rehabilitation

Various rehabilitation options are offered by different bodies, e.g. by local authorities’ social services throughout Iceland, at Reykjalundur rehabilitation centre and as vocational training for the disabled. Individuals most often turn to the rehabilitation fund VIRK, which provides services throughout Iceland in collaboration with trade unions. Specialised counsellors in vocational rehabilitation at VIRK, who are in most cases connected to local trade unions, work closely with the unions’ sickness insurance funds.

Requirements for rehabilitation pensions in Iceland

The principal condition for granting a rehabilitation pension is that the individual must participate actively in a rehabilitation programme under the supervision of a professional, aimed at regaining the capacity to work.

The person concerned must also:

  • have been domiciled in Iceland for the last 6 months before making an application or for 3 years, if his/her capacity to work was reduced when arriving in Iceland; 
  • be 18-67 years of age; 
  • have exhausted any entitlement to sick leave from an employer and sickness or accident benefits paid by unions and insurance companies; 
  • not be entitled to unemployment benefits; 
  • be undergoing rehabilitation in accordance with an established rehabilitation plan.

Rehabilitation when the person is domiciled in Iceland but works in another Nordic state

An agreement between Nordic countries enables a person to apply for rehabilitation in the country of residence, even though his/her insurance entitlement is in the country of work. The conditions vary between the Nordic countries. An individual can apply to the public authority (in Iceland the Social Insurance Administration, Tryggingastofnun) in the country of work and examine the possibility of reaching an agreement for rehabilitation and/or payments between two countries.

Rehabilitation pension is not paid to other countries, with the possible exception of Nordic countries - if an agreement is reached on rehabilitation/payment to an individual.