The maximum period of available unemployment benefit will be shortened from two-and-a-half years to two years, according to a new Government proposal.
Þorsteinn Víglundsson, the minister in charge of social and equal rights affairs, says that unemployed people will receive extra help rejoining the employment market instead. The leader of the Icelandic Confederation of Labor describes the move as a backward step which is an attack on the basic protections for working people.
The cut to unemployment benefit limits is presented in the Government’s financial plan and represents the second time in three years that the benefit period has been cut by six months. The minister believes the cut will mean national insurance payments will not have to be increased to keep up with any future rise in unemployment. He also says the maximum period of benefits payments should be flexible and reflect the unemployment rate.
At the moment, the employment situation in Iceland is very good, the minister says. This means that very few people will be looking for work for two years.
Unemployment is currently in the region of three percent in Iceland, RÚV reported.
The period of unemployment benefit was three years during the financial crisis, and many people had to take advantage of their right.