Pregnancy and parental benefit

Birth-related benefit comprises parental and pregnancy benefit.

If certain conditions are met, each parent has an independent and non-assignable entitlement to parental benefit from the Childbirth Leave Fund, Fæðingarorlofssjóður for up to three months. The parents then have a joint entitlement to parental benefit for a further three months which they can share between them as they whish. The parents can have parental benefit at the same time or during different periods.

Conditions

Parents who have been continuously on the Icelandic labour market for 6 months before the birth of the child or when the child comes to the family through adoption or has been a long-term foster child, earn the entitlement to parental benefit. The working period in another EU country needs to be taken into consideration if the parent has been working the last month in the residential country during the 6 months period.. The degree to which they have worked shall be at least 25%.

Parents who are outside the labour market (the degree to which they have worked is below 25%) are entitled to pregnancy benefit. Those who are on the Icelandic labour market but who do not comply with the conditions and those who study full time have the same entitlement. The condition for entitlement to pregnancy benefit is that the person concerned is registered for census purposes on Iceland at the time of birth as well as during the previous 12 months.
The condition for receiving the benefit is that paid work ceases during the period when benefit is paid. The entitlement to parent benefit ceases when the child reaches the age of 36 months but the right to pregnancy benefit ceases when the child reaches the age of 18 months. 

Benefit

The parental benefit for working parents is 80% of the average wage over the last two years up to a given maximum limit. Pregnancy benefit to parents outside the labour market is a given amount per month. In the case of independent workers the benefits are calculated according to the income declaration the year before the year of the childs birth, other rules are applied in the same way as workers. The pregnancy benefit outside the working market is a certain amount per month.