Funding for Municipal Services for People with Disabilities to Increase by ISK 5 Billion

Alþingi Icelandic parliament

Local municipalities will now receive a permanent increase in funding for legally required services for people with disabilities. RÚV reports that this increase will amount to ISK 5 billion [$35.028 million; €33.043 million] a year.

Per an announcement on the government’s website, the agreement was c0signed by the chair and executive director of the Association of Local Authorities and the Ministers of Finance and Economic Affairs, Infrastructure, and Social Affairs and the Labour Market on Saturday. It is aimed at helping local municipalities “achieve established performance and debt targets according to the current financial plan for the years 2023 – 2027.”

Under the terms of the agreement, local taxes will increase by .22% against a corresponding reduction of state income tax. The tax burden on individuals will not change, however. Rather, the agreement deals with the specific transfer of funds from the state to local municipalities.

Local municipalities have long called for increased funds to provide services for people with disabilities and are still calling for higher contributions. Per Saturday’s agreement, both local authorities and the three undersigning ministries agree to conduct expense analyses for services provided with the aim of renegotiating the agreement next year.

Government to Fund Summer Jobs and Summer School for Students Again

Lilja Alfreðsdóttir Ásmundur Einar Daðason

The government will spend 2,4 billion ISK on creating summer jobs and providing summer school opportunities for students this summer. This was first done last year to combat the effect of the global pandemic on the economy but students criticised its execution.

This year, the government will spend 2.4 billion ISK towards creating temporary jobs for 2500 students 18 years and older, within government institutions, municipalities, and associations. Workplaces hiring students will receive funding for a full-time salary, up to 472,000 ISK per month (the limit for unemployment benefits) including 11.5 % for retirement funds for a duration of two and a half months. According to Minister of Social Affairs Ásmundur Einar Daðason, “it’s vital that as many students as possible will get a job this summer, where they will gain a valuable experience as well as creating value for the economy.”

In addition to the summer job program, the government will spend 650 million ISK to ensure the availability of summer studies this summer, 500 million to universities and 150 million to secondary schools. 650 secondary students attended summer school last year and just under 5000 university students. Finally, the Icelandic Student Innovation Fund issued 311 million ISK in grants, funding 206 projects and providing 351 students with work. The fund’s goal is to give universities, research institutes and companies a chance to hire undergraduate and master’s students for summer jobs in research and development.

Last year, The University of Iceland Student Council criticised the initiative for not meeting the requirements of students hit hard by the pandemic’s effect on the economy, claiming the jobs created were too few and too specialised to serve a large number of students. Student Council President Isabel Alejandra Diaz states that while students were thankful for the initiative, its execution was flawed. “This was supposed to benefit both University and secondary school students but most of the jobs required a year or two of University studies.” The Student Council hopes that the initiative could be more than a short-term solution and instead become a long-term program that would help university students find work in their field to gain valuable experience. The Council claimed that students’ interests would be better served by allowing them to qualify for unemployment benefits and to raise the basic subsistence allowance within the student loan system. They also criticised the duration of the program as last year, the initiative funded student jobs for two months, which wasn’t enough to cover the whole summer. This year, the jobs will cover two and a half months but the jobs available to students are yet to be revealed.  The Government’s press release does note that authorities will keep a close eye on how the initiative progresses to ensure that students won’t be without work or means of subsistence this summer.

The government’s press notice also states that they are continuing their efforts to raise the basic subsistence allowance for subsistence loans while noting that basic subsistence allowance has increased more than inflation but haven’t kept up with overall increased purchasing power. “Work on bridging this gap is ongoing and an important step in this direction is planned for the coming weeks. Suggestions on the matter will be introduced to the Minister of Education and Culture before May 1.”

Twelve-Month Parental Leave Approved

The government has approved a bill on birth and parental leave presented by Minister of Social Affairs Ásmundur Einar Daðason. The most notable change is the extension of parental leave from the current ten months to 12 months for children that are born, adopted or fostered permanently from January 1, 2021.

The main change proposed in the bill is an extension of parental leave from 10-12 months. Each parent will have a right to six months of leave, but parents can transfer one month between them so one parent will be able to take seven months and the other 5. The bill has gone through the government’s consultation gateway, and some changes were made during that process. The most controversial point of the bill, inciting the most comments in the Consultation gateway as well as public discourse, is parents’ equal rights to leave. Previous laws had stipulated four months of leave per parent, and two months they could divide between them according to their preference. While some criticised the bill for reducing flexibility for parents, others have praised it for encouraging men to take equal leave as women.

Before the consultation process, the proposed bill stated that parents forfeit the right to leave if they hadn’t used it before the child reached the age of 18 months, but the revised bill allows parents to take leave until the child is 24 months old, as before. Other stipulations in the bill include the transference of the right to parental leave if one parent can’t use their leave. The reasons including restraining orders, no right to parental leave in Iceland or their country of origin, or if the child’s paternity is disputed.

The bill is the result of the work of a committee the Minister appointed in 2019 to review the 20-years old laws on parental leave. The minister had stated that even though the rules were progressive at the time, it’s high time to review them. “We want Iceland to be a good place to have and raise children, and with this bill, we’re increasing the rights of parents to spend time with their children in the first months of their lives.” Projected costs of parental leave in 2021 will be 19.1 billion ISK, just under double the amount in 2017.


Changes to Parental Leave Law Encourage More Equal Division of Childcare

Reykjavík baby

Proposed changes to Iceland’s parental leave law hope to more equally balance childcare responsibilities between mothers and fathers, Kjarninn reports. If the current revisions are passed, both of a child’s parents would be allotted six months of leave, but only one of those months would be transferable between parents.

A new draft of the new parental leave law has been published on the government’s website and will be open for public comment until October 7.

At the end of 2019, parliament voted to extend parental leave from nine months to 12. This change will go into effect on January 1, 2021 and, per Minister of Social Affairs and Children Ásmundur Einar Daðason, will be extended in stages. Parental leave in Iceland is currently 10 months—four months per parent plus two that can be shared between them. However, studies have shown that the majority of fathers in Iceland only take the four months specifically allotted to them, while the majority of mothers take their four months as well as the two months that they could potentially be sharing with their partners.

Changing the status quo

The revised bill hopes to change this status quo by making paternity leave nontransferable. The logic is that if paternal leave is not sharable to the same extent it is now, parents—particularly fathers—will be encouraged to shoulder an equal burden of the childcare in their households and will also be in a stronger position to negotiate with their employers about taking their full allotted leave time.

Another significant change to the current law would be that parents would have a shorter timeframe in which to exercise their right to take parental leave—a year and a half instead of two. The aim of this change is to ensure that parents take their leave when their children are in the greatest need of their care, that is, from the time of their birth to when they are eligible for daycare.

The drafted bill also proposes that both parents have an independent right to two months’ leave in the event of a miscarriage or stillbirth that takes place after 18 months’ pregancy.

New Bill Would Create Grief Leave for Parents Who Have Lost a Child

Alþingi Icelandic parliament

The Ministry of Social Affairs is at work on a bill which would create a ‘grief leave’ for parents who have lost a child, RÚV reports. It’s hoped that the drafted bill will be ready to present to parliament by the spring.

Minister for Social Affairs and Children Ásmundur Einar Daðason previously explained that the grief leave would expand on rights already in place for people living in Iceland, such as parental leave when a child is born. The ministry is also considering making provisions for parents who have recently been widowed.

In June, Ásmundur Einar said this initiative, like many others, had been put on the back burner while the government shifted its focus to coronavirus-related legislation. Ministry experts have since been able to return their attention to the proposal, however, and a draft of the proposed bill is in progress.

Increased Housing Security for Renters in Proposed Bill

housing Reykjavík

Minister of Social Affairs Ásmundur Einar Daðason presented a bill proposing widespread changes to rental law at an open meeting yesterday. The bill is part of the government’s “standard of living contract” signed in 2019.

“The bill is intended to improve housing security for tenants by preventing unreasonable rent increases and promoting long-term rentals, as well as establishing mandatory registration of lease agreements and mediation,” the bill’s abstract states.

Banking collapse forced low earners onto rental market

Iceland’s rental market grew by 70% following the 2008 banking collapse, and most who entered the market were low earners, according to information presented at the open meeting. During the same period, rental prices increased by around 45%. Today around 8,000 households pay over 50% of their income toward rent. According to international standards, housing costs are considered burdensome if they exceed 40% of an individual’s income.

According to the bill, the average duration of rental leases in Iceland is just 14 months. The proposed legislative changes would tighten the regulations on short-term leases, thus encouraging longer contracts. The new legislation would also limit landlords’ ability to increase rent.

Another change proposed by the bill is the establishment of free mediation services to tenants and landlords, assisting them on settling disputes without going to court.

Drífa Snædal, President of the Icelandic Confederation of Labour (ASÍ), praised the bill, stating “One can’t think of a better improvement to collective agreements than lowering housing costs.”

Government and Unions Respond to WOW air Bankruptcy

WOW air airplane

The Icelandic government will allocate an additional ISK 80 million ($652,000/€580,000) to the Directorate of Labour in order to help the institution respond to the mass layoffs that have resulted from WOW air’s bankruptcy. Meanwhile, VR Union is working to ensure its members who have been laid off by WOW will get unemployment benefits immediately, a process that usually takes months.

WOW air’s bankruptcy last Thursday has already led to some 1,500 layoffs so far, the largest mass layoff in Icelandic history. The vast majority of those left unemployed, or around 1,100, were employees of WOW. Another 315 were laid off by Airport Associates, which provides air terminal service at Keflavík Airport. A large construction company in the Keflavík area has let go of 40 employees, while tour bus company Reykjavík Excursions has laid off 59. Keflavík airport’s Duty Free stores have also laid off six employees, citing that around 30% of passenger traffic at the airport was due to WOW air’s flights.

Directorate of Labour gets a boost

The Directorate of Labour mobilised a response team immediately following WOW air’s bankruptcy. “Subsequently, we have been working on measures under the auspices of strengthening the Directorate of Labour, and it was agreed […] that 80 million would be supplied from the reserve fund to support the Directorate of Labour,” stated Minister of Social Affairs Ásmundur Einar Daðason.

The Minister added that the money would be distributed to the directorate’s service centres in Reykjavík and Reykjanesbær, adding that the government would keep an eye on the employment insurance fund, though it was too early to say how much additional funding it may need in light of the layoffs.

VR Union lends to unemployed members

Some 250 workers who lost their jobs as a results of WOW air’s bankruptcy are members of VR Union. The union’s chairperson Ragnar Þór Ingólfsson says VR decided yesterday to lend its members the equivalent of their monthly wages for April in order to bridge the gap until employment insurance kicks in. The loans, Ragnar Þór explained, will be “paid back” to VR from their own employment insurance fund once the pending paperwork comes through. VR also held a meeting yesterday for former WOW employees to inform them on how to fill out the necessary paperwork for claiming unemployment benefits.