The Child Support Collection Centre, a public agency responsible for collecting child support payments from parents, has been under scrutiny for its management practices for years, RÚV reports.
Last week, the municipality collection agency in Iceland was ordered to pay a woman ISK 19 million [$140,000, €127,000] in compensation for significant gender-based wage discrimination. This was confirmed by Aldís Hilmarsdóttir, the agency’s chairperson. Over a 40-month period, the agency paid the woman almost ISK 500,000 less in monthly wages than a male colleague in a comparable position, without any legitimate reason. Of the total compensation, ISK 18 million was for wage discrimination and ISK 1 million for damages.
Recently, the agency has undergone a significant overhaul, with staff being fired, former executives being investigated by the prosecutor’s office, searches and arrests being made, and the Icelandic National Audit Office recommending significant changes to its operations. The agency has approximately 20 employees working in Reykjavik and Ísafjörður.
Since its establishment over a century ago, the Child Support Collection Centre’s main purpose has been to collect child support payments from parents, primarily fathers. The Icelandic National Audit Office and others have recommended that this function be transferred to the state, stating that it is unnecessary to maintain an entire agency with a large number of employees solely to collect child support. In addition to this issue, the management practices of the centre have also been questioned.
An audit of the agency’s operations was requested by the government as part of a restructuring of child support collection. The investigation uncovered several irregularities, including financial mismanagement, lack of proper accounting, and inadequate record-keeping. The audit also revealed that the centre’s revenues come primarily from late payment fees, with almost 80% of its income being derived from such fees. The agency suffered losses of ISK 100 million [$740,000, €670,000] in 2021 and ISK 120 million in 2020, despite its revenues being around ISK 270 million in 2021.
It remains to be seen how the government will respond to these recommendations and whether the agency’s operations will be transferred to the state.