Government Will Not Raise Unemployment Benefits

The Minister of Finance, Bjarni Benediktsson, told RÚV that the government will not be raising unemployment benefits. However, he said that it would be possible to extend the time period of income-related unemployment benefits; i.e., unemployment payments based on how much one earned at their previous job.

This comes two days after an announcement from The Icelandic Confederation of University Graduates (BHM) called on the government to raise the maximum income-related unemployment benefits.

The Confederation of Icelandic Employers has been running a campaign against increased benefits, claiming that higher benefits reduce the incentive to work. Bjarni echoed this sentiment when he was asked why he did not want to increase unemployment benefits. “It seems to be very difficult in spite of everything to get people who are on unemployment benefits to come to work,” he said, adding that the minimum wage is not high enough to encourage people to get off unemployment.

Kristján Þórður Snæbjarnarson, the first vice-president of The Confederation of Icelandic Labour Unions (ASÍ), said that it is a great disappointment that unemployment benefits will not increase. He said that it is important to ensure people have an income that is sufficient to meet the obligations they had before they lose their jobs. He also said that it is necessary to extend the benefit period to at least six months.

“People never choose to go on unemployment,” he said. “Of course, it is the case today that unemployment varies from region to region. It can be costly for people to relocate and seek employment where there are jobs, and it is often temporary employment.” He finished by saying that all of these factors must be looked at in context, and reiterated that people will not choose to be unemployed if there are jobs available.