Welfare Minister Presents Consumption Guidelines Skip to content

Welfare Minister Presents Consumption Guidelines

Minister of Welfare Gudbjartur Hannesson presented new consumption guidelines for households in three categories yesterday: typical guidelines, short-term guidelines and basic guidelines.

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A couple with two children, one of whom is in playschool and the other in elementary school, who live in the capital region in their own house, typically spend over ISK 617,000 (USD 5,300, EUR 3,900) per month, which is considered moderate consumption, ruv.is reports.

“We must face what the nation creates in value and how it is divided […]. It will be hard and hurtful for the nation to realize that we have do downsize consumption by 20 percent, even if we get the economy fully going again with consideration to the state’s interest cost and other consequences of the collapse,” the minister told Morgunbladid of his interpretation of the consumption guidelines.

In the case of short-term guidelines, which assume that people can reduce consumption and postpone expenses short-term, the same family spends ISK 448,000 (USD 3,900, EUR 2,900) per month.

The basic consumption guidelines for the same family assumes monthly expenses of ISK 283,000 (USD 2,400, EUR 1,800), which excludes the cost of housing and running a car.

The typical consumption guidelines for an individual are ISK 291,932 per month (USD 2,500, EUR 1,800), ISK 384,401 (USD 3,300, EUR 2,400) for a single parent with one child, ISK 464,102 (USD 4,000, EUR 2,900) for a single parent with two children and ISK 538,828 (USD 4,600, EUR 3,400) for a single parent with three children.

The purpose of the guidelines, which were made by a committee of experts appointed in June last year, is to make it easier for people to calculate their expenses and compare them to the expenses of other members of society.

Ombudsman for Debtors Ásta Sigrún Helgadóttir told Morgunbladid that the guidelines will impact the payment assessment for indebted individuals as they explain what consumption guidelines should be followed.

According to Fréttabladid, Hannesson said the consumption guidelines are the first step towards finding a basis for the social security system and even for wage contracts as well.

President of the Icelandic Confederation of Labor (ASÍ) Gylfi Arnbjörnsson disagrees. “It is all right as an input for discussions but it isn’t anything tangible that can be used regarding wage contracts.”

“This committee has been working since last summer and people expected that it would shed a clearer light on what families need to be regular participant in society. It doesn’t say anything about what they need, only what they are,” Arnbjörnsson commented.

Gudmundur Magnússon, chairman of the Organization of the Disabled in Iceland, said the guidelines can prove a good basis for calculations, although various items of expense are lacking.

“We have to be efficient in making additions and ensure that the authorities recognize them. Then it could prove useful both for us and the labor movement in the future,” he said.

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