Iceland No Longer Following Nordic Welfare Model

Harpa Njálsdóttir, who has been analysing the development of the Icelandic welfare system for the past decade, recently told RÚV that Iceland is no longer following the Nordic welfare model.

The Nordic welfare model is a system based on universal rights, where citizens are believed to have a right to basic services such as housing and healthcare. Provisions for said services are therefore largely overseen by the government, and they involve for instance social security, social services and housing, income equality and much more.

Although Iceland had acquired a reputation for its social welfare system in the past, according to Harpa the country is now steadily moving towards liberal policies and so-called ‘conditional assistance,’ or tied aid, such as the ones regulating the health system in the United States. In this system, welfare and healthcare are contingent on individuals’ income, with extremely low taxes and a system that encourages citizens to look to charity organisations for assistance, instead of the government.

What’s interesting about Harpa’s conclusions is that the image we’ve had of Iceland for the past years does not correspond to reality anymore, and those who seem the least inclined to admit it are political leaders.

“Our politicians still claim that we follow the Nordic model,” she says. “But we’ve actually already signed out of that model, and the Icelandic welfare system has more in common with liberal systems, as of now.” The best way to see these changes, Harpa explains, is to look at how social security has been undergoing heavy revisions and how certain services are now severely underfunded—for instance in favour of disabled individuals.

According to Harpa, who refers to numbers from Statistics Iceland, 70% of elderly people now live well below national subsistence criteria, while about 70% of those who live alone and in bad conditions are women. In particular, she warns about the future of citizens who have been working for public institutions such as nursing homes, primary schools and kindergartens, as their minimum wages will later translate into dangerously low pensions.