Words by

Larissa Kyzer

Government ministers intend to implement the maximum budget reductions of 600 million ISK for both the Child Benefits and Interest Relief social support programs, Vísir reports. Minister of Finance Bjarni Benediktsson says that these cuts are necessary in order to put more money towards public health projects. The cuts are just a few of those which have been under debate as part of Iceland’s 2014 budget.  
Child benefits are quarterly payments which assist families with childcare expenses from the year after a child’s birth to the time he or she turns 18. Individual payment amounts are determined based on marital status, yearly taxable income, the number of children in a family, and how many of those children are under the age of seven. And Interest Relief is available to homeowners who are paying interest on loans for the purchase or construction of a private home, based on their income, assets, and the type of loan taken.
Following the reductions to Child Benefits and Interest Relief, funding to the health care system would increase by about 3.5 billion ISK, Vísir reports, 1.5 billion of which would be put towards the purchase of new equipment at the National Hospital in Reykjavík as well as the hospital in Akureyri.
Elín Björg Jónsdóttir, the chairperson of Iceland’s Federation of State and Municipal Employees (BSRB), stated in a press release that the proposed reductions to these programs will hit the lowest income families with children the hardest.
“Child benefits are part of income equalization measures…The rental market is also crowded with young families with children and single parents.” Low income families with children will not benefit from current debt relief plans connected to mortgage relief, she says, and now may also receive less in Child Benefits as well. So as they currently stand, says Elín, the proposed measures will increase social inequality, and “come down the hardest on those who are the least able to fight against them—the poorest families with children.”