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Covid-19 information

The Government of Iceland has announced various measures to mitigate the economic and societal effects of the coronavirus outbreak.

November 20, 2020. 

The Government has decided to pay a special supplement over and above basic unemployment benefits next year, so as to support the large group of people whose income-linked unemployment benefits will expire in the next few months. The 2.5% supplement will be paid in addition to the 3.6% increase provided for in the 2021 fiscal budget proposal. With these increases, which total 6.2%, basic unemployment benefits will equal ISK 307,403 per month.

Increased payments for support of job-seekers’ children will be extended through the end of 2021, with a 6% supplement added to basic unemployment benefits for each child instead of the previous 4%. Moreover, a December supplement of just over ISK 86,000 will be paid to confirmed job-seekers.

Resilience subsidies

Resilience subsidies will help society to be better prepared for the time when global economic activity opens up again. The resilience subsidies are a direct continuation of the revenue loss subsidies. They are intended to help companies maintain a minimum level of activity while the impact of the pandemic persists. The measure applies to all taxable entities that suffer at least a 60% loss of revenue, irrespective of their operational form. It applies as well to sole proprietors who conduct business activities under their own national ID number.

For entities suffering revenue losses between 60% and 80%:

  • The maximum subsidy ranges up to ISK 400,000 per monthly full-time position equivalent
  • Capped at ISK 2 million

For entities suffering revenue losses between 80% and 100%:

  • The maximum subsidy ranges up to ISK 500,000 per monthly full-time position equivalent
  • Capped at ISK 2.5 million

The subsidy amounts are based on operating expenses but may not exceed the amount of the revenue loss during the period in question.

In the case of substantial revenue losses suffered by sole proprietors or very small businesses whose operating expenses consist largely of their estimated salary, the entity is authorised to base operating expenses and the number of full-time position equivalents on figures from the same month in 2019.

Support for families with children

The means testing threshold in the child benefits system will be permanently raised, thereby ensuring that it changes with developments in the lowest wages in the labour market. This change will ensure that single parents with two children and a monthly income of ISK 350,000-580,000 will receive an annual increase of ISK 30,000 in child benefits, and that for a family whose combined monthly income is ISK 700,000-920,000, child benefits will be ISK 60,000 higher than they would be otherwise.

Support for disability pensioners and vulnerable groups

A one-time payment of ISK 50,000 will be made before 18 December to recipients of disability and rehabilitation pensions who are eligible for pensions during the year, in addition to the December supplement that is usually paid during the month. At the beginning of 2021, permanent changes will be made to the disability pension system. Internal reductions will be scaled down, and the lowest-paid disability pensioners will receive a supplement of nearly ISK 8,000 per month in addition to the planned 3.6% increase provided for in the fiscal budget proposal. The total increase in social security benefits for the lowest-paid disability pensioners will therefore be nearly ISK 20,000 at the turn of the year.

In addition, a range of mitigating measures will be adopted so as to strengthen vulnerable groups during the pandemic, and a response team on households’ financial position will be established. Members of the response team will include representatives from financial institutions, stakeholder groups, and the Debtors' Ombudsman.

Further information on the Government measures can be found here:

Resilience: Strengthening Iceland’s Foothold – measures announced 20 November 2020 (In Icelandic)

Slide presentation on continuation of Government measures: Slide presentation (In Icelandic)

Information on active Government measures in connection with the pandemic can be found on Viðspyrna.is.

Governmental Economic and Social Measures from Spring 2020

In order to slow down the spread of the coronavirus and to protect vulnerable groups, the Icelandic health authorities have introduced measures such as social distancing, ban on large gatherings, widespread testing as well as tracing infections.

The Government of Iceland has announced various measures to mitigate the economic and societal effects of the coronavirus outbreak.

Impact on Gender Equality 

The Government of Iceland has announced various measures to mitigate the economic and societal effects of the COVID-19 outbreak. The information below explains those measures with a special focus on measures aimed at promoting gender equality.

Reducing the spread of COVID-19 in Iceland

Actions on violence against women and children

It is a well-known fact that domestic violence, and especially by men against women and children, increases in pandemics such as COVID-19. The likelihood of domestic violence becomes even greater when women and children are isolated in their households with abusive men. According to the latest statistics from the Reykjavik Metropolitan Office  in Iceland, reports of domestic violence increased by 14% since the outbreak of COVID-19. However, evidence from municipalities and professionals working in the field indicates that the increase is probably higher, as victims of domestic violence do not necessarily seek help immediately. Reports of sexual violence to the Reykjavík Metropolitan Police have however decreased by 48% during the first eight months of the year compared to the average of last three years.

One of the government’s most important measure to prevent violence has been the effort to limit the social impact of restrictions to contain the virus. Pre-primary and compulsory schools have remained open and at no point has a lock-down been imposed. Services for victims and perpetrators of violence have also remained open and adjusted their services to the containment restrictions.

Violence prevention measures

  •  A violence prevention task force was put in place in order to manage and coordinate the implementation of violence prevention measures
  • The National Emergency Number 112 has been reinforced and developed to better accommodate reports of domestic violence and violence against children. The 112 website will become an overall forum for information on available services provided by public, non-governmental and private entities.
  • New option of online chats with an emergency dispatcher.
  • An experimental women’s refuge opened in Akureyri.
  • Increased support to vulnerable children that are considered likely to resort to violence. A team within the Reyjavík Metropolitan Police works with young perpetrators and educational material distributed among young people.
  • An awareness-raising campaign against domestic violence was launched, resources were made more visible on social media, education was increased and information was disseminated widely. An action team was appointed to direct and coordinate the implementation of measures against violence.
  • The task force is developing proposals of further actions regarding perpetrators, accommodation for survivors, violence prevention and education to parents, children and young people as well as actions to prevent violence against people with disabilities. Special focus is on developing technical solutions for while restrictions are in place and that can continue to be used after the pandemic.

Financial aid for non-governmental organisations and municipalities

  • The Women's Shelter received a grant of ISK 100 million in the government's first action package for COVID-19. Stígamót, a counseling and support centre for people who have been sexually abused, received ISK 20 million in response to increased demand for the centre’s services, thereby reducing waiting times for services. 

New procedures for domestic violence cases

  • The National Police Commissioner improved work procedures and increased specialised police training to handle the increase in domestic violence.

 

Impact on health

  • Statistically men are more likely to become seriously ill due to COVID-19. Women are generally under more stress due to increased care and home responsibilities and are more likely to stand in the front line in demanding work related to the epidemic. This is often stressful, low-paid work, where the rewards are not commensurate with the risk.
  • Women are more likely to perform basic service work during the COVID-19 epidemic and are therefore more exposed to infection. Women working in the healthcare sector are generally in closer proximity with patients than men working in the same sector. Such gender division within the health sector is well known and the same pattern exists in most European countries. Strain on the healthcare system and other restrictions have far-reaching effects and can result in cutbacks to services, e.g. for pregnancy and maternity care, which affect women more than men.

Protective equipment and wage premiums

  • Personal protective equipment has been provided for healthcare workers and they are being screened more closely for infection.
  • ISK 1 billion was set aside for special risk compensation payments to employees of hospitals and healthcare institutions who work under heavy strain. The payments were in the form of one-off payments to front-line workers in the healthcare system. 


Focus on maternity and childbirth services

  • Special attention has been paid to women’s healthcare and to maintain pregnancy and childbirth services and post-natal care.
  • A decision was made to examine the health of Icelanders from a gender and equality perspective, to assess whether healthcare service provision takes the different needs of women and men into consideration.

 

Impact on paid and unpaid work


 As a result of the gendered labour market in Iceland, when services are reduced women are more likely to be forced out of paid work to care for children than men. The impact is especially great on single parents. Furthermore, grandparents are not able to help families during COVID-19 as would normally be common, due to their higher risk of infection, and this increases the burden even further.  On a national level unemployment is slightly higher among women than men but there are regional differences and unemployment is higher among women in all parts of the country except the capital area where it is slightly higher among men. The greatest gender difference is in Suðurnes, where unemployment is much higher among women than men.



Schools remain open

  • Front-line jobs that are considered basic services in COVID-19 cannot be performed remotely. This makes it difficult for people to deal with the closing of pre-primary and compulsory schools etc.
  • Pre-primary and compulsory schools have therefore been kept open with certain restrictions and workers in front-line and crucial jobs have been given more extensive access to such facilities for their children.

Care grants

Grants have been awarded for the care of disabled and chronically ill children, if sevices normally provided are closed. Social and financial support for families can help relieve the burden of unpaid care work that women are much more likely to do.


Economic Measures

The impact of the Government’s economic measures on men and women varies due to their different economic situation.

Individuals and families


Furlough scheme

  • The gender distribution of applicants for partial payment of salaries for those in reduced work positions benefit roughly corresponds to the proportions of men and women in the labor market.
  • Older analyses have shown, however, that on average men generally receive a higher proportion of income-related unemployment benefits than women, even after adjusting for the gender ratio of unemployment benefit recipients.
  • As payments up to ISK 400,000 per month are not subject to reduction or cut, the part-time salary benefit is likely to provide relatively more assistance to persons in lower-income jobs and thereby promote equality. However, it is important to continue to monitor the utilisation of this resource and its impact on women and men.

Special child benefit supplement

  • All parents with dependent children have received a child benefit supplement. Those who received income-linked child benefits received a ISK 42,000 supplement while others received ISK 30,000.
  • Women accounted for 56% of those who received child benefit supplements, while 59% of the total amount of supplementary benefitspaid was to women. Women were thus more likely to be entitled to the payment.
  • This difference is largely explained by the gender distribution of single parents. 90% of single parents who received supplementary child benefits are women and 96% of them received the higher amount while 86% of single fathers did.


Withdrawal of private pension savings

  • Men's premiums are considerably higher than women's, men are more likely than women to be able to take advantage of this option and withdraw higher amounts.
  • In 2020 it is estimated that women will withdraw 35% of the total amount and men 65%. On average women make up 39% of those making withdrawals and their average monthly withdrawal is 14% lower than that of men.

Job search activity and summer resources for students

  • Additional funding was provided to the Student Innovation Fund due to COVID-19 and 426 summer jobs were created for students. The jobs were divided almost equally between men and women.
  • Jobseekers will be able to begin a course of study and receive full unemployment benefits for one semester beginning with the spring semester of 2021. The initiative is limited to vocational and technical studies at upper secondary school or university, compensatory education or academic upgrading, for example in healthcare and teaching. These study programmes do not seem to attract men and women equally, and it is therefore possible that it could result in unequal utilization of resources and lead to different subsequent income opportunities for men and women.

 

Companies

Progress in innovation

  •  Fewer women than men apply for government-sponsored competitive funding, and additionally, women often apply for lower amounts. The rate of success between women and men is, however, is similar in most funds.
  • Increased contributions to the competitive funds are therefore likely to be more beneficial for men than women, if the needs and qualities of women entrepreneurs are not considered specifically.
  • New competitive funds have been set up as part of measures to address the impact of COVID-19. The boards of the funds have agreed on gender equality goals for allocations, which are likely to help equalise the effects of the grants on women and men.
  • An allocation from the Technology Development Fund distributed during the summer of 2020 resulted in male applicants receiving ISK 180 million (75%) and women ISK 60 million (25%).


Closing grants

  • When formulating conditions for grants to firms for redundancy payments, self- and part-time employment were not excluded because women are much more likely than men to perform such work.
  • Two-thirds of grants distributed after the first wave of Covid-19 went to private health care providers, dentists, physiotherapists, hairdressers and beauty salons but women make up the majority of workers in all these sectors.

The Economy

Encouraging investment

  • Based on the gender ratio of workers in the industries that will benefit from the investment programme after the first wave, it can be assumed that 85-90% of the jobs created during the construction period will be done by men.

The new projects or improvements to existing infrastructure will in most cases not have a major impact on the number of future employees involved. The projects are therefore either not considered as positively impacting or likely to promote equality by increasing the number of jobs done by women or providing improved services that could reduce unpaid care work.

Expansion of the “Everybody works/wins” campaign

  • It can be assumed that the vast majority of jobs resulting from the increase in the VAT refund rate for construction, renovation or maintenance of residential housing as well as car repairs will be done by men, as more than 95% of those working in auto maintenance, construction trades and civil engineering are men.
  • A programme to reimburse VAT for domestic assistance or regular care of residential housing is more likely to create paid work for women, as more women than men work in this field. It may also improve the legal status of those working in this area as well as reduce unpaid housework which is mostly done by women.

Economic impact - Containment measures

In August 2020 the Minister of Finance and Economic Affairs appointed a working group, entrusted with the task of analysing the economic impact of different options for epidemic containment measures. The Minister’s letter of appointment required that the analysis take into account, among other things, “the interests of different groups in society and sectors of the economy" and that in addition to short-term effects an assessment be made of the ability of the economy “to make a strong recovery once the epidemic and its effects had passed”. The Minister requested the group's first report be delivered by 13 September 2020.

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