Child benefits and housing benefits increase – Special interest support introduced

Part of the actions that the government agreed to undertake, in relation to the collective agreements of the labor unions and SA, have now come into effect. Special interest support for households has now been opened, child benefits have been increased and housing benefits increased at the end of last month. More actions are then ahead.

In connection with the collective agreements negotiations in the general labor market, Efling union emphasized early on achieving a consensus among the unions that make up the Icelandic Federation of Labour (ASÍ) to unite at the negotiating table. Emphasis should be placed on restoring the public welfare system to reach an agreement on long-term collective agreements with modest wage increases.

As a result, the Union Alliance came united to the negotiating table. An important success was achieved in the collective agreements and the government agreed to the demands of the labor movement for actions in the interest of households in Iceland. Since the collective agreements were reached last March, Alþingi has discussed and processed bills related to the actions announced by the government in a statement alongside the collective agreements.

People determine the use of interest rate support

To meet the increased interest burden on households, special interest support has been determined for residential property. This special interest support will not be paid out but will be allocated to individual mortgages. The support can either be allocated to the principal of a loan or used to lower installments. However, people have to do this themselves, on the service website of the National Tax Administration. Everyone is encouraged to go to the service website and take the measures that suit them best. If people do not do this, the interest subsidy will be paid into the principal of the loan with the highest balance.

At the end of April, Alþingi approved changes to the child benefit system, which include an increase in the basic benefit, an increase in the cut-off limit, and lower-income cut-offs. The changes have already taken effect and will increase child benefits this year significantly. Child benefits can be calculated here.

Housing benefits have also been increased, starting at the end of last month. The impact of the changes depends on family size but can be calculated here.

More issues are related to the government’s statement concerning collective bargaining agreements. Among other things, there are changes to the housing rental law, increased funding for the maternity leave fund, and a discussion on free school meals.

You can read more about the government’s actions on the ASÍ website.