The disposable income of single parents increases by up to 76,000 ISK

The disposable income of single parents with two children, living on the rental market, will increase by 68 to 76 thousand ISK per month. That is the equivalent of monthly salary increases of 104 to 107 thousand ISK. These compensations are part of Efling’s new collective agreement with SA.

Stefán Ólafsson, professor emeritus and expert at Efling, has calculated the benefit of single parents from the new collective agreement. The calculations can be seen in the attached graph. Stefán’s calculations show that the relative increase in disposable income is greatest in the lowest income group, where it is 20 percent, but smaller in the highest, where it is around 10 percent.

Most of the benefits come from the public redistribution system and the municipalities, as seen in the graph. Also, considerable increases in disposable income will accompany the reduction in inflation, as the increased purchasing power of the agreed wage increase will be greater. In addition, the benefits included in reduced interest rates in parallel with falling inflation can also be significant.