• Introduction and Overview
• Highlights
• Government Agencies
• Demographic and Other Social Trends
• Social Protection
• Child, Youth and Family Policy Regimes
• Maternity, Paternity, Parental, and Family Leaves
• Early Childhood Education and Care (ECEC)
• Family and Child Allowances
• Child and Family Tax Benefits
• Child Support
• Other Child Conditioned Income Transfers
• Child and Adolescent Health
• Youth
• Housing
• References
• Notes
• Contacts

(Last updated August 2005)

Introduction and Overview

Iceland seems to be something of a modified Nordic model, with an explicit family policy but with measures that are somewhat less generous than in the other Nordic countries.

According to Eydal and Olafsson (2003):

Icelandic family policy has been fragmentary in nature and family policy was hardly referred to in public debates until the 1990s when it gained greater political attention. In 1994 (the UN's Year of the Family), a proposition was put forth in a parliamentary debate that called for a coherent body of family policy. Research on families was also influential and promoted further debate and policy making (see, Broddadóttir, 1994; Júlíusdóttir, 1993; 1995). In 1997, the Icelandic parliament, Alþingi, passed a resolution on both the formation of an official family policy as well as measures to be implemented that would strengthen the position of the family (Alþingistíðindi, 1997:A, 1230). Parliament formally recognized the need for explicit public family policy with this resolution (Júlíusdóttir, 2001).

In 1997 the Parliament enacted a resolution supporting the creation of a public family policy to re-enforce the status of the family. The basic premises of the policy are that the welfare of the family is based on equality between men and women, that the family is the setting for emotional ties both within marriage and within cohabiting relationships, that family life is essential for the well-being of children. Other aspects of the policy include statements concerning protection of the family against violence, assuring families of economic security, and ensuring the rights of immigrant families, of the families of the disabled, and of the families of homosexuals. The legislation requires the establishment of a Family Council with responsibility for advising the government on family affairs, coordinating the relevant activities of different ministries, and promoting research especially with regard to the economic situation of families with children. It stresses the importance of fathers being encouraged to take parental leave.

Iceland is a country characterized by a relatively high birth rate, a high rate of out-of-wedlock births, a high rate of cohabitation, a very high rate of female labor force participation, and a very low unemployment rate for both men and women.

Family policies include the specifics mentioned earlier, maternity, paternity, and parental leave policies that are generous, but less so than in the other Nordic countries and much less in the way of early childhood education and care services. Cohabitation is treated the same as legal marriage. In addition, in 1996 a law was passed permitting two adults of the same sex to enter into a registered partnership carrying with it some of the perquisites of marriage. Iceland ranks 6th among the OECD countries in per capita social spending, as a percentage of GDP, with only Canada, Ireland, Luxemburg, Norway, and US spending more per capita. Family benefits and services constituted about 2.8% of GDP in 2001, the lowest of the Nordic countries.

Table 1. Support to Families with Children in 1996-1997

During the 1990s, some significant policy changes in the field of family policies have taken place and the Alþingi accepted a parliamentary resolution on family policy. New laws on the equal rights of both parents to paternity/maternity leaves and the ratification of the ILO resolution regarding employees with family obligations are two examples of changes that are results of the family policy resolution from 1997. In the field of family law, various changes have ensured that children have greater rights to care from both parents, e.g. the possibility of joint custody. Gender equality issues have also been high on the political agenda and new laws on the Equal Status and Equal Rights of Women and Men came into force. The day-care services have been radically improved and the importance of day-care or playschools as the first stage of schooling has been further emphasized by law. After School Services have also been improved during the period in question. Children’s rights have been enforced through different laws and the ratification of the UN's Convention on the Right of the Child.

However, not all changes have benefited families, e.g. during the period in question, there have been cut-backs and reforms in the child benefit system and research on poverty shows that certain groups among families with children are in a precarious situation.

Even though the following statement has not been confirmed by systematic research, the 1990s can be characterized as a decade of the family – because the importance of family and care related issues reached in a more explicit way than before the political agenda and policy-making. The overall generosity of public family benefits was on the other hand reduced during the decade as it became increasingly income-tested. Thus the total expenditures on those benefits were lower at the end of the decade than at its beginning.

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Highlights

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Government Agencies

The major ministries for purposes of child and family policies are: Ministry of Social Affairs and the Family Council within it, the Ministry of Health; the Ministry of Social Security; the Ministry of Finance; and the Ministry of Education and Science.

Demographic and Other Social Trends

Iceland had a population of about 289,000 in 2003 overwhelmingly Lutheran as to religion. It is a small country, the most sparsely populated in Europe. About 80 percent of the country is uninhabitable, and the vast majority of the population lives in the coastal belt area in the south or southwest. Iceland is a "young" country with 23 percent of its population under age 15 and only 12 percent aged 65 and older. Its fertility rate is high for Europe, at 2.0, just about the replacement level, like the U.S. Its out -of-wedlock birth rate is exceptionally high, at 65 percent. Its infant mortality rate is low, at 2.6, and has declined steadily since 1986. Its unemployment rate is very low at 2.3 percent in 2003 and its female labor force participation rate is high, at about 83 percent.

Despite its high out-of-wedlock birth rate, 83 percent of children under age 16 lived in families with two adults in 1998, 61 percent in a husband/wife family, 22 percent with a cohabiting, not legally married couple, and 17 percent with a lone parent.

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Social Protection

Iceland is a Nordic country with a language and culture related to that cluster of countries. Initially part of Denmark, Iceland established itself as a modern republic in 1944 when 97 percent of the population voted to be independent of Denmark. Since World War II it has had an increasingly high standard of living, comparable to that of the other Nordic countries, with a per capita GDP in 2002 of $29,400. National income rose rapidly after the War and the national economy underwent dramatic changes, transforming itself from a subsistence economy through rapid urbanization and other features of industrialization. The quality of housing in Iceland is higher than in most places, while the Icelandic roads are poorer than in most countries with a comparable standard of living. The latter is due mainly due to the size of the country and the sparsely distributed population.

Social expenditures constitute 19.5 percent of GDP in 2003, far below that of the EU average but the share going to child and family benefits, at 11.7 percent, is significantly higher than the average.

Iceland has the prevailing social protection system of the Nordic countries: old age insurance, survivor's benefits, disability benefits, unemployment benefits, health insurance, workers compensation, family benefits, and maternity benefits. All elderly are entitled to an old age pension and all employees and the self-employed, to a second tier, wage-related, occupational pension. Children are entitled to both types of Survivor's benefits in the event of the death of an insured parent and full orphans receive a double benefit. Worker/s compensation and unemployment insurance both carry entitlement to dependents' benefits as well.

Single parents enjoy special support in various areas (MISSOC, 2003). There is a special single parent allowance and childcare is subsided both centers, family day care homes, for single parents.

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Child, Youth and Family Policy Regimes

Maternity, Paternity, Parental, and Family Leaves

Maternity/Paternity and Parental Leaves refer to leaves at the time of childbirth, adoption, or the taking of a child under age 8 into foster care.

A new act in maternity, paternity, and parental benefits and leaves was enacted in 2001. Benefits are provided following childbirth to parents who have worked for a least 6 consecutive months before claiming the benefits.

Eligibility criteria for a parental leave is at least 6 months prior employment before beginning the leave, and for new residents, at least 12 months of residence in the country.

Each parent is entitled to a three-month maternity/paternity leave following birth or adoption but a woman can begin her leave one month before expected birth and each parent can take an additional 3 months for an unpaid parental leave of 12 months in total (6 paid and 6 unpaid), which must be taken by when the child reaches the age of 18 months. In the case of adoption, the leave begins either when the child enters the parents' home or, if parents must travel to collect the child, when the travel begins. In the case of multiple births the leave can be extended by an additional three months; or in the case of the baby's illness or the mother's illness, it can be extended accordingly. The mother must take at least two weeks leave after birth. While on maternity/paternity leave parents are entitled to a cash benefit replacing 80 percent of their prior wages. In the case of a non-working, at-home parent, a minimum benefit is provided. The 12-month leave may be spread out over the first 18 months after birth, but must be completed within that period. Cash benefits are included in taxable income.

Sick child leave permits a parent to stay at home to care for a child under age 13, for up to 13 weeks, without loss of income.

The Icelandic Act on Maternity/Paternity Leave and Parental Leave is targeted at the working and unemployed parents, and parents attending full-time educational programs.

The aim of this Act is to ensure children's access to both their fathers and mothers. Furthermore, the aim of this Act is to enable both women and men to co-ordinate family life and work outside the home.

Unemployed parents have the same rights to parental leave, but the benefit level is lower. Employees have the right to return either to their job after having had a leave, or to the same kind and level of job.

The Minister of Social Affairs is in overall charge of maternity/paternity leave. All payments to parents are handled by Maternity/Paternity Leave Fund that is managed by the State Social Security Institute. The Maternity/Paternity Leave Fund is financed through the collection of an insurance levy in addition to interest on the Fund's deposits.

Regarding parental leave (to take care of sick child), the Act reads (Eydal & Olafsson, 2003):

Parents are entitled to parental leave for 13 weeks to care for their children; the right to a parental leave will terminate when the child reaches the age of eight years; each parent shall have an independent right to parental leave, which shall not be assignable; parental leave shall not be accompanied by payment from the Maternity/Paternity Leave Fund; a parent shall have the right to take parental leave in one continuous period; however, the employee shall be permitted to make other arrangements with his/her employer for the parental leave to be divided into number of periods.

In both cases (maternity/paternity leave and parental leave) the employee shall be entitled to return to her/his job upon the completion of maternity/paternity leave or parental leave, or if this not possible, she/he shall be entitled to a comparable position.

Excerpted and adapted from: Act on Maternity/Paternity Leave and Parental Leave, Icelandic Ministry of Social Affairs, 2000.

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Early Childhood Education and Care (ECEC)

Compulsory school begins at age 6 and ends at age 16. Preschool is for children under age 6, is administered by the Ministry of Culture and Education, and is delivered largely by the public sector. The core philosophy is that the programs are to integrate care and education. In 1999, 57 percent of children aged 0-5 were enrolled in full day, full year care, 86 percent of the 3-5 year olds and 42 percent of those under age three. Parents pay income-related fees, amounting to about 32 percent of operating costs. Coverage has increased dramatically over the last decade, from 42 percent over all in 1990 (73 percent of the 3-5 year olds and 14 percent of the under 3s). Shortages exist for the infant/toddler programs, and some parents use informal family day care as a result; but the preference is for center care. Most local authorities provide non-means-tested subsidies to single parents to pay for private childcare.