CHILD BENEFIT PAYMENTS (BARNABÆTUR)

Parents who have custody of their children aged 18 years and younger are entitled to child benefit payments (barnabætur). The amount paid per family is determined by the status of each family, that is, the earnings of the family and the number of children aged 18 years and below. Single parents are entitled to higher payments than married couples, or couples who live in registered co-habitation.

Payments are made four times a year, in February, May, August and November. The amount paid in February and May are estimates calculated in advance, whilst payments made in August and November are based on the net income of the parents for the previous year. As a result, if the payments made in February and May were too high, deductions will be made from the August and November payments, and vice versa.

Child benefit payments to foreign citizens residing in Iceland, as well as Icelandic citizens who have moved back into the country, are calculated starting from the date of arrival in Iceland. The first payment for children born in Iceland is paid out in February a year after the child’s birth. It is not necessary to submit an application to receive child benefit payments as these benefits are automatically calculated from taxes.

For married couples and those registered common-law, child benefit payments are reduced if the combined income of the couple is more than kr. 1.859.329 a year. Payments to single parents are reduced if the total income for the year is more than kr. 929.665.

For more information, contact:

The Internal Revenue Directorate

Laugavegi 166

Tel: 563 1100 

www.rsk.is

Their website also has an easy to use calculator that will give parents an idea of the benefits they are eligible for.