Annuity Insurance Payments

Annuity insurance payments comprise old age pensions, invalidity  pensions, age-dependent invalidity
supplements, rehabilitation pension,  invalidity allowances and child allowances.

Old age pensions

People living and working in Iceland for a stipulated length of time can at the age of 67 apply for an old age pension.

To acquire the right to an old age pension, an individual must be 67 years old and have lived in Iceland at least three calendar years between 16 and 67 years of age. Old age pensions are paid starting at age 67, regardless of occupation or marital status. Men and women have the same right. Residence for 40 years between 16 and 67 years of age entitles people to a full old age pension, while shorter residence proportionally reduces the pension. The amount of the pension thus depends on a person's length of residence. The amount of an old age pension is determined by law, and pensioners' incomes affect this.

Seamen can start drawing their old age pension at age 60, after fulfilling certain conditions regarding sailing.

Old age pensions and various types of compensation paid along with it are linked to income.

Invalidity pensions

Invalidity means reduced proficiency because of disease or accident. It is assessed in accordance with a specific disability standard based on both physical and mental proficiency. Those meeting the disability standard can be entitled to receive a invalidity pension if they are between 18 and 67 and have resided in Iceland for at least the three last years before applying for the pension or for six months if their work capacity was undiminished when they took up residence in Iceland.

The amount of a invalidity pension depends on the pensioner's length of residence in Iceland and income.

Income insurance

Income insurance is paid in addition to a basic pension (old age pension and invalidity  pension) if a pensioner's income does not exceed a certain annual limit.

Invalidity allowance

An invalidity allowance may be paid to those between 18 and 67, who meet the disability standard and have resided in Iceland for at least the three last years before applying for the pension or for six months if their work capacity was undiminished when they took up residence in Iceland. An unreduced invalidity allowance is 75% of a full invalidity pension, and the payments are linked to income. Starting at age 62, the invalidity allowance is the same amount as a invalidity pension.

Child pension

A child pension is paid to parents of children under 18 if one of the parents has been ruled eligible for a invalidity or rehabilitation pension. A child receives a double child pension if both of its parents have died or are both invalidity pensioners. The child or one of its parents must have been domiciled in Iceland for at least the last three years before the application is submitted.

A child pension may be paid for a child of old age pensioners or a child of a person under detention or in prison if such has gone on at least three months.

Recipients of an invalidity allowance can be entitled to a supplemental invalidity allowance because of his or her children.

Adopted children and stepchildren enjoy the same legal status under the same circumstances. A child pension is  paid when papers from a district commissioner are on file stating that a child's paternity cannot be established.

A child pension is not paid for children receiving an invalidity pension. A child pension is not linked to income.

Personal allowances

Personal allowances is payments to pensioners living in an institution.

Pensioners living at a medical institution, short-term residence or service facilities can be entitled to a personal allowance when their pensions expire. The pension stops when residence at an institution or short-term residence goes on for more than six months over the last 12 months. This, however, applies only to stays lasting for 30 continuous days at the end of this period. An allowance is linked to income.

This site was revised 2nd. February 2016