There is no need to apply for child allowance that is paid for children up to the age of 18. The child allowance is income related but, for each child below the age of 7, there is a supplement that is decided upon irrespective of income. Child allowance is not taxable. Child allowance is paid by the Financial Management Authority, Fjársýsla ríkisins each quarter, 1 February, 1 May, 1 August and 1 November.
The Icelandic tax authorities calculate child benefit on the basis of information about the parents’ legal status and number of children at the end of the previous year. Consideration is also given to income according to the tax return for the previous year.