Faroe Islands unemployment scheme builds 1.7 billion kroner reserve

The Faroe Islands’ unemployment insurance scheme ALS recorded a surplus of 191 million kroner in 2025, bringing its total assets to more than 1.7 billion kroner, broadcaster KVF reports.

ALS also recorded surpluses of 210 million kroner in 2024 and 225 million kroner in 2023. More than 600 million kroner has therefore been added to its reserves over the past three years.

According to ALS’s annual report, the scheme could withstand unemployment of 6 per cent for nine years, or 8 per cent for five to six years, before becoming insolvent.

Contributions from employees and employers totalled 207 million kroner last year, while payments amounted to just under 70 million kroner, including the fish-processing scheme. Unemployment stood at 1 per cent, with an average of 311 people fully unemployed.

The fish-processing scheme paid out 16.8 million kroner in 2025. About 1,000 people are covered by the scheme, which guarantees them a 32-hour working week when there is little or no work at the processing plant to which they are attached.

At the start of the year, the ALS contribution was reduced from 0.8 per cent to 0.6 per cent. The maximum ALS payment is currently 22,435 kroner per month.

ALS expects to record a surplus of between 130 million and 140 million kroner this year.

Unemployment among the lowest in the world

ALS’s annual report suggests that unemployment in the Faroe Islands may be the lowest in the world. The scheme found only four countries with lower rates: Qatar at 0.2 per cent, Cambodia at 0.3 per cent, Niger at 0.4 per cent and Thailand at 0.8 per cent.

“The labour markets and unemployment in these countries can hardly be compared with the Faroe Islands, and it may be that unemployment in the Faroe Islands is the lowest in the world overall,” ALS writes.

At the end of last year, unemployment was 3 per cent in Denmark, 4.5 per cent in Norway, 5.3 per cent in Iceland, 8 per cent in Sweden and 10 per cent in Finland.