Financial assistance

Financial assistance is provided in accordance with the Municipalities’ Social Services Act and the municipality’s rules, which state that each and every person is obliged to support himself/herself, his/her spouse and children under eighteen years of age. 

The main reasons for financial assistance are unemployment or illness, and that all avenues for other forms of benefits or other payments from elsewhere have been exhausted. The assistance is intended to provide support toward self-help for residents and to prevent individuals and families ending in such dire circumstances that they are unable to resolve their own affairs. 

The amount of financial assistance takes account of the taxable income of the applicant or married couples and cohabiting couples, with their taxable income being deducted when the amount is calculated. As of 1 January 2022, the reference limit of financial assistance is ISK  208.337  for a single person and ISK 333.339 for married couples and cohabiting couples.

The amount depends on housing circumstances in each case. The assistance does not take account of the number of children involved as it is assumed that child benefits, child support, child pension and care allowance will cover expenses relating to children. Housing benefits and interest benefits cover the different costs relating to housing. Financial assistance is taxable. Applications for financial assistance are to be in writing and, in order to be considered valid, the following must be attached:

  • Required documents

    • Confirmed tax return, assessment note and withholding tax statement from the Directorate of Internal Revenue for the applicant and the spouse or cohabiting partner.
    •  Information on the income and other payments of the applicant and spouse or cohabiting partner, including the wage slips of the past two months, payments from Tryggingastofnun ríkisins (Social Insurance Administration), pension funds, the Directorate of Labour, union sickness funds, Icelandic Health Insurance and/or the Childbirth Leave Fund.
    • If the applicant is able to work, a confirmation of registration with the Directorate of Labour must be submitted or confirmation that benefit entitlements from the Unemployment Insurance Fund have expired.
    • If the applicant is unable to work, a medical certificate to that effect must be submitted.
    • If the applicant is studying, confirmation of school attendance must be submitted and confirmation that the applicant is not entitled to a student loan from the Icelandic Student Loan Fund (LÍN).

    Further information may be obtained from the consultants in the consultancy team in the Welfare Department, tel. 441 0000.

Last updated 18. January 2022