A parent can suffer a loss of income by taking bereavement leave, as payments from The Directorate of Labour are intended to compensate in part for the loss of income when a parent ceases employment during bereavement leave. The loss of income which The Directorate of Labour is not intended to compensate for, the parent can be compensated by the employer without reduction of payments from The Directorate of Labour, although without the parent performing work duties.
Surveillance
A monthly inspection is conducted by comparing information on payments from The Directorate of Labour with records from the tax authorities.
Payment reductions
A parent is permitted to be compensated for a loss of income which The Directorate of Labour is not intended to compensate for.
Payments from an employer intended for a period other than when the parent was on bereavement leave, will not reduce payments from The Directorate of labour.
It is permitted to take into account salary increase according to collective agreements, other payments according to collective agreements, and salary changes related to the parent’s employment until the first day of bereavement leave.
Incompatible rights
Parents who receive payments from The Maternity/Paternity Leave Fund according to the legislation on Maternity/Paternity Leave and Parental Leave, cannot use their entitlement to payments of bereavement leave for the same period.
Parents who receive payments from The Unemployment Insurance Fund according to the legislation on Unemployment Insurance, cannot use their entitlement to bereavement leave for the same period.
Parents who receive accident per diem payments according to laws on social security accident insurance, sickness per diem payments according to legislation on health insurance, or rehabilitation pension according to laws on social assistance, cannot use their entitlement to bereavement leave for the same period.
A parent who receives sickness per diem payments from a union’s sickness fund, cannot use their entitlement to bereavement leave for the same period.
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, cannot use their entitlement to bereavement leave for the same period.
Parents who receive payments according to legislation on payments to parents of chronically ill or severely disabled children, cannot use their entitlement to bereavement leave for the same period.
Parents who receive vacation pay or an employment termination payment cannot use their entitlement to bereavement leave for the same time period as these payments.
Payments from other countries due to the same loss of a child, the same stillbirth, or the same miscarriage, for the same period, will be deducted from payments of bereavement leave.
Correction of payments
Parents receiving underpayments
If parents receive lower payments than they should have from The Directorate of Labour according to the assessment of the tax authorities, The Directorate of Labour is required to pay the difference to the parent with interest for the time period the money was held by The Directorate of Labour. Interest rates shall be equal to the rate decided and published by The Central Bank of Iceland according to Article 8, paragraph 1 of Act. No. 38/2001 Interest and Price Indexation. The same applies when The Welfare Appeals Committee concludes that a parent was entitled to payments from The Directorate of Labour, but payments had before been refused or calculation lead to a reduction of payments. When payments from The Directorate of Labour have not been made due to lack of information, they do not bear interest.
Parents receiving overpayments
If parents have received higher payments from The Directorate of Labour than they were entitled to according to the assessment of the tax authorities or for other reasons, they must reimburse the amount that was overpaid, plus a 15% surcharge. The surcharge shall be revoked if parents can argue that they are not to blame for the shortcomings which lead to The Directorate of Labour’s decision.
The importance of reporting changes
It is important that a parent informs The Directorate of Labour about everything which could result in overpayments from the directorate, including changes regarding the period of bereavement leave or income.
Restoring entitlements
A parent may be entitled to bereavement leave and payments from The Directorate of Labour following a reimbursement if other conditions are met, such as an agreement with their employer about a plan for bereavement leave, and that the entitlement to bereavement leave has not been revoked due to time limits.
