The parent shall apply for bereavement leave payments to The Directorate of Labour.

Calculation of payments is based on information The Directorate of Labour obtains about parents’ income from tax returns, the withholding tax register, and the tax authorities’ social security contributions register.

To be entitled to payments during bereavement leave a parent must have been in at least a 25% employment ratio and continuously working for the last 6 months in the domestic labour market before the loss of a child.

An employee’s full-time employment is 172 hours per month, but generally the number of working hours considered to be a full time job according to collective agreements shall be taken into account. In which case, 43 working hours would generally be considered to be a 25% employment ratio.

Parents who are self-employed are considered to be in full-time employment when they have paid monthly income tax and social security contributions on calculated remuneration or wages at a minimum of the reference amount published by Iceland Revenue and Customs in the relevant profession or according to collective agreements.

When parents have been employed in another member state of the EEA Agreement during the aforementioned 6-month period, this will be taken into account if the parents have started working in the domestic labour market within 10 working days from when they ceased employment in the labour market in that country and are participating in the domestic labour market at the loss of a child, stillbirth, or miscarriage. In such instances, a parent shall submit a S-041 certificate with their application which confirms their employment periods and accrued insurance in another state of the EEA agreement, and an employment contract which confirms when employment commenced in the domestic labour market.

In addition to continuous work, there are certain instances which are also considered participation in the domestic labour market. See more details in the section on what else is considered participation in the domestic labour market.

What else is considered participation in the domestic labour market

In addition to continuous work, the following also considered participation in the domestic labour market:

-Annual leave or other leave according to law, a collective agreement or an employment contract, even though it may be partly or entirely unpaid, and the parent’s employment ratio in the period in question has been at least 25%. If an employee has been on unpaid leave, a copy of an employment contract and agreement with the employer has to be submitted.

-The time during which parents receive unemployment benefit payments, spend in a waiting period for such payments, would have been entitled to them if they had registered as being unemployed, or the parents have temporarily ceased job search due to vacation abroad and no more than ten working days have passed until job search has started again according to the current Unemployment Insurance Act, provided that the parent’s employment ratio during the period of the aforementioned payments has been at least 25%. The Directorate of Labour’s Payment Office assesses whether parents would have been entitled to unemployment benefits if they had applied for them. A copy of the assessment has to be submitted.

-The time during which a parent receives payments from The Maternity/Paternity Leave Fund according to the Act on Maternity/Paternity Leave and Parental Leave, or would have been entitled to such payments if the parent had applied for them, provided that the parent’s employment ratio during the period of the aforementioned payments has been at least 25%.

-The time during which parents receive per diem payments for illness and accident injury, spend in a waiting period for per diem payments, or would have been entitled to them if they had applied for them according to the Act on Health Insurance and Act on Occupational Injury Insurance, or receive sickness per diem payments from a union’s sickness fund providing that the parent has ceased employment for health reasons, if the parent’s employment ratio during the period of the aforementioned payments has been at least 25%. Icelandic Health Insurance assesses whether parents would have been entitled to payments if they would have applied for them. A copy of the assessment has to be submitted.

-The time during which a parent receives compensation from an insurance company in lieu of wages due to temporary loss of employment resulting from an accident, if the parent’s employment ratio during the period of the aforementioned payments has been at least 25%.

-The time during which a parent receives wage-related payments according to the legislation on payments to parents of chronically ill or severely disabled children or would have been entitled to such payments if the parent had applied for them from The Social Insurance Administration, if the parent’s employment ratio during the period of the aforementioned payments has been at least 25%. The Social Insurance Administration assesses whether parents would have been entitled to payments if they would have applied for them. A copy of the assessment has to be submitted.

Accrual period and calculating payments

Accrual period:

• The accrual period for calculating payments to parents in the labour market is a 6-month continuous period which ends 2 calendar months before the loss of a child, stillbirth or miscarriage.
• Despite the aforementioned 6-month rule, only the months when a parent has been in the domestic labour market shall be considered, as well as incidents mentioned under the items regarding what else is considered to be participating in the domestic labour market. Calculation of payments shall never be based on fewer than 3 months.
• Parents who, for instance, pursue studies amounting to more than 10 ECTS credits and are employed in less than 25% employment ratio could be entitled to having those months excluded from calculation of payments and thus increase their payments of bereavement leave. If parents believe that this may apply to their circumstances, they are requested to inquire with the staff of the service center in Hvammstangi* who will guide them through the next steps.  

Calculating payments:

• A monthly payment to a parent is 80% of average gross wages of the months in the accrual period.
• Wages are considered to be all kinds of income, compensation and calculated remuneration according to legislation on social security contributions, as well as instances in items a-f under what else is considered participation in the domestic labour market and payments, according to the Act on The Wage Guarantee Fund, Article 5, items a and b.
• Calculation of payments is based on information obtained regarding parents’ income from tax returns, the withholding tax register, and the tax authorities’ social security contributions register.
• Low income parents are entitled to a certain minimum payment amount, subject though to a maximum, see more under maximum and minimum payments.

Minimum payments

Low income parents are entitled to a certain minimum payment amount in proportion to their employment ratio. Payment amounts depend on what year a parent suffers the loss of a child, stillbirth or miscarriage.

Information regarding payments for those employed in 25-49% and 50-100% of a full-time position can be found here.*

Maximum payments

Even though payments during bereavement leave are 80% of the average gross wages for a certain period, they can never be higher than a certain amount. Maximum payment amounts depend on what year a parent suffers the loss of a child, stillbirth or miscarriage.

Information on maximum payments can be found here.

Bereavement leave payments are made retroactively, for the preceding month.

Example: A parent who has been on bereavement leave in January will be paid on the last working day of that month.

While on bereavement leave, a parent pays a 4% minimum of bereavement leave payments to a pension fund and The Directorate of Labour pays a contribution at a minimum of 11.5%.

A parent is permitted to pay to a private pension fund, but The Directorate of Labour does not pay a counter-contribution.

A parent is permitted to pay to a union while on bereavement leave. If that is not done, entitlements provided by a union may be reduced or terminated.