A monthly inspection is conducted by comparing information on payments from The Maternity/Paternity Leave fund with records from the tax authorities. 

• A parent is permitted to be compensated for a loss of income which The Maternity/Paternity Leave Fund is not intended to compensate for. 
• Payments from an employer intended for a period other than when the parent was on maternity paternity leave will not reduce payments from The Maternity/Paternity Leave Fund. 
• 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 maternity leave. 

• Parents who receive payments from The Unemployment Insurance Fund according to the legislation on Unemployment Insurance cannot use their entitlement to a birth grant, payments from The Maternity/Paternity Leave Fund or parental 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 a birth grant or payments from The Maternity/Paternity Leave Fund 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 a birth grant or payments from The Maternity/Paternity Leave Fund for the same period. 
• Parents who receive vacation pay or an employment termination payment cannot use their entitlement to a maternity/paternity grant or payments from The Maternity/Paternity Leave Fund for the same time period as these payments. 
• Payments from other countries due to the same birth and for the same period will be deducted from payments of a birth grant and payments from The Maternity/Paternity Leave Fund. 

Parents receiving underpayments 

• If parents receive lower payments than they should have from The Maternity/Paternity Leave Fund 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 kept in The Maternity/Paternity Leave Fund. Interest rate 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 Maternity/Paternity Leave Fund, but payments had before been refused or calculation lead to a reduction of payments. When payments from The Maternity/Paternity Leave Fund 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 Maternity/Paternity Leave Fund then 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 insufficiencies which lead to The Directorate of Labour’s decision. 

It is important that a parent informs The Maternity/Paternity Leave Fund about everything which could result in overpayments from the fund, including changes regarding maternity/paternity leave or income. 

A parent may be entitled to a maternity/paternity leave and payments from The Maternity/Paternity Leave Fund following a reimbursement if other conditions are met, such as an agreement with their employer about a plan for maternity/paternity leave, and that the entitlement to a maternity/paternity leave has not been revoked due to the child’s age or the time from when the child entered the home after confirmed adoption or permanent foster care.