On New Year's Day, 500 People Lose Unemployment Insurance - The Reykjavik Grapevine

On New Year’s Day, 500 People Lose Unemployment Insurance

Published December 28, 2014

Clients given ten days notice —172 job vacancies listed in November —Minister optimist

Clients given ten days notice —172 job vacancies listed in November —Minister optimist

On December 18, the Directorate of Labour announced that as of January 1, 2015, the duration of unemployment insurance will be reduced by six months, from three years, to two and a half. This is in accordance with next year’s State Treasury budget, passed by Alþingi earlier this December.

According to DV, some 500 people, 8.5 percent of those currently dependent on the insurance, will thus immediately be left without it.

Seventeen jobs towards “the Nordic model”

Interviewed by RÚV, Eygló Harðardóttir, Minister of Social Affairs and Housing, says that the Treasury will save around 1 billion ISK (ca. €6 mi), annually, by thus reducing the duration of unemployment insurance. She further stated that the change signalled the Government’s move towards the “Nordic model of unemployment insurances” by “reducing the insurance period and increasing job market solutions activity”.

Directorate of Labour - Vacancies 1/2

Directorate of Labour - Vacancies 2/2

According to the Directorate of Labour’s November bulletin, a total of 172 job openings were then registered in the country, down from 268 in October. The Directorate forecast a slight increase in unemployment. As of this writing, late December, seventeen part- or full-time vacancies are listed on the Directorate’s website.

Without insurance with a ten days notice

Gylfi Arnbjörnsson, Chair of the Icelandic Confederation of Labour (ASÍ) has criticised both the policy and its implementation. He says that there is no indication there will be jobs available to most of those now left without insurance. He also criticised the ten days notice given for the change, as much too short. Minister Eygló responded, on RÚV, by saying that the Government intends to expand the job market. Regarding the short notice, she said that the idea had been introduced in the Treasury budget proposal earlier this year.

Those who lose their unemployment insurance before finding employment, can apply for last resort financial aid at the municipal level. The number of those dependent on those less standardised benefits was among the concerns noted by UN Human Rights Expert Juan Pablo Bohoslavsky, on his fact-finding mission to Iceland, early December.

Municipal benefits discriminative, warns UN

In his preliminary findings, Bohoslavsky noted that “persons depending on municipal financial aid – the support of last resort – have nearly doubled form a low of 4,280 households in 2007 to over 8,000 houshold in 2013.” The eligibility criteria for such financial aid differ highly, depending on place of residence, said Bohoslovsky, and that equal and non-discriminative treatment “appears to be missing”.

Eygló Harðardóttir

Asked if the municipalities can afford providing financial aid to more households, Minister Eygló Harðardóttir said: “We have emphasised, and it is also part of our new approach, that more municipalities use the services offered by the Directorate of Labour,” apparently referring to the directorate’s employment agency function. “I want to encourage the members of municipal councils to contact the Directorate of Labour and review the services and measures available for those people who already receive financial aid from the municipalities, or will perhaps move over, because I am absolutely convinced that together we can help people find jobs.”

The Minister further added that “in my mind this”, presumably referring to the implementation of the policy change, “must first and foremost be centered on assisting people in finding a job. And prospects are bright in that regard.”

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