High-Income Professionals Receive Unemployment Benefits Skip to content

High-Income Professionals Receive Unemployment Benefits

High-paid professionals, who work less than full time due to decreased work hours, are eligible for income-related unemployment benefits from the government’s Unemployment Benefit Fund in an addition to their existing salary, visir.is reports.

Minister of Social Affairs, Árni Páll Árnason.

Currently, no stipulation exists that a salary has to be under a certain amount for the employee to be eligible for part-time benefits, according to Gissur Pétursson, director of the Directorate of Labour. Last November, Althingi agreed on an amendment, granting people who work part-time income-related unemployment benefits for a longer period than before.

The maximum part-time payment due to a cut down in work hours is ISK 120,000 a month (950 USD) for six months, if the working hours are reduced from full time to half time. The minimum employment payment per month is just under ISK 150,000 (USD 1,170). Therefore, the difference between the minimum unemployment payment and the maximum payment due to reduced work hour amounts to ISK 30,000 (USD 240).

“As an example, a few dozen people who went from earning ISK 1,000,000 (USD 7,800) per month for a full time job went to half a million for a 50 percent reduction in work hours, get an additional ISK 120,000 (USD 940) per month for six months as compensation for their decreased work hours. Some might call that quite generous,” Pétursson says.

According to the Minister of Social Affairs, Árni Páll Árnason, the provision regarding income-related unemployment benefits was meant to prevent unemployment. The system is constantly under revision, and it is vital that resources such as this not be exploited.

“It must be ensured that in these cases, that working hours have actually been cut, and unemployment therefore prevented. The Directorate of Labour is not intended to compensate for the inevitable salary cuts of companies,” he explains.

Árnason says that, if nothing changes, the Unemployment Benefit Fund will run dry come November. “Special effort will be made in cooperation with the Directorate of Tax Investigations to deal severely with unemployment-benefit fraud as well as any kind of black market work operation.”

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