If you are paid unemployment benefits, you are permitted to seek employment in Europe and retain your per diem allowance. You then travel abroad with a so-called U2 Certificate, which grants you permission to be paid unemployment benefits for up to three months (although never longer than your benefit entitlement permits) while you are seeking employment in an EEA state. Application forms for a U2 certificate are available at The Directorate of Labour’s service centres and website.  

The main conditions to be issued with a U2 certificate are that you must be completely unemployed, have been registered as unemployed continuously for four weeks prior to departure, and have not declined a job offer. 

Applications for U2 certificates must be submitted three weeks before departure. The certificate is valid for 3 months. 

You are required to continue to confirm your job search as usual between the 20th and 25th of each month in ‘My pages’ on The Directorate of Labour’s website.  

The main conditions to be issued with a U2 certificate are as follows: 

• You must be a citizen of an EEA state 
• You must have a confirmed entitlement to unemployment benefits in Iceland before departure
• You have been registered as unemployed for at least four weeks continuously 
• You must be completely unemployed 
• You intend to seek employment abroad 
• Your application is submitted three weeks before departure 

U2 - íslenska 

U2 - English 

U2 – Polski 

Applications is to be submitted via email to uvottord@vmst.is 

If you have applied for a U2 certificate but have decided not to use it, you are required to notify The Directorate of Labour immediately. 

When you have arrived in the country that you intend to seek employment, you must as-soon-as-possible visit the nearest unemployment agency and register as a job seeker. To be able to receive your per diem allowance from the certificate’s validity date, you must register within seven working days from the certificate’s validity date. If you register after this period, then you are only able to receive the per diem allowance from the date of registration. If you are unable to register the first time that you visit the unemployment agency, it is essential to obtain a confirmation from the authorities that you have contacted the employment agency and attempted to register. 

The employment agency in your country of residence will send a confirmation of your date of registration to The Directorate of Labour’s disbursement (payments) office. 

The Directorate of Labour will continue to pay unemployment benefits for the certificate’s validity period while you are seeking employment abroad, providing that the regulations of the unemployment agency where the job seeker is residing in are fulfilled. The foreign labour authorities will also determine if the jobseeker is actively seeking employment and send a report to The Directorate of Labour in Iceland. 

The period of permission to seek employment in another EEA state cannot be extended beyond three months. 

You must remember to deregister as a job seeker at the unemployment agency in your country of residence before you return to Iceland. You are permitted to cease seeking employment abroad and return to Iceland within the certificate’s validity period. 

To be able to continue to be entitled to unemployment benefits in Iceland, you must return to Iceland before the certificate expires. In sub-item 2.2.1 of the certificate you can find information regarding the certificate’s expiration date. If this day in a Saturday or Sunday or a public holiday, you can return on the next working day. 

You have seven working days from the certificate’s expiry date to register at The Directorate of Labour after your return to Iceland. If you do not register at the directorate in accordance with the above, you will lose your entitlement to unemployment benefits upon your return to Iceland. You will not be entitled to unemployment benefits again until you have worked in Iceland for at least three months in a minimum 25% employment ratio. 

The Directorate of Labour can in exceptional circumstances, extend the deadline of your return to Iceland. The Directorate of Labour can, for instance, permit you to register after the certificate’s expiry date if you are able to prove that you are attending an interview after applying for employment in another state. Your return to Iceland can also be postponed if you can prove that you were indisposed due to illness, you are however required to submit a confirmation regarding this (doctor’s certificate). You are required to apply for an exemption before the certificate expires. 

The deadline for returning to Iceland will not be extended due to plans to stay in another EEA state (beyond the validity of the certificate) in order to wait for per diem payments or the possibility of travelling back to Iceland. 

You are not entitled to unemployment benefits you go on holiday in another EEA state following the certificate’s validity period. 

If you do not intend to continue to receive payments from the unemployment insurance fund, you must however, notify your return to The Directorate of Labour within 7 working days. Should you fail to do so, you will be required to re-earn your entitlement to unemployment benefits. 

You are able to obtain a U2 certificate again after 6 months from the expiration date of the previous period and you have worked for at least 3 months on the Icelandic labour market, and otherwise fulfil the provisions of Act no. 54/2006 on Unemployment Insurance. 

If you do find employment in another EEA state, you cease to be unemployment insured in Iceland. However, your employment period in the EEA state (if you were unemployment insured there), can be transferred to Iceland in the foreign authorities confirm your insurance and employment period, with a certificate called U1. You can turn to the relevant unemployment insurance authorities before you return to Iceland and request the required certificate. 

If you intend to move to another EEA state, you are able to obtain a certificate that you are entitled to unemployment insurance in Iceland. It is therefore possible to transfer earned unemployment insurance rights between European countries. This is done by applying for a U1 certificate from The Directorate of Labour and enclosing confirmations of employment period from all the employers you have worked for in the previous 3 years. 

We encourage everyone who intends to seek employment abroad to obtain information regarding the European Health Insurance Card. Full information is available here: https://www.sjukra.is/english/health-insurance-abroad/european-health-insurance-card/