Borgarbyggð seeks task force over rising aid costs for Ukrainian refugees

Borgarbyggð municipality has asked Iceland’s Ministry of Social Affairs and Housing to establish a special working group because of a sharp increase in financial assistance to Ukrainian refugees living at Bifröst, mbl.is reports.

The municipality is particularly concerned about older people who have not accumulated pension rights in Iceland. Its council says some of them are unlikely to secure other income and may therefore have to rely on financial assistance from their municipality “for the rest of their lives”.

Unnur Brá Konráðsdóttir, the municipality’s director, said the group was continuing to grow.

“People over 60 appear to have the greatest difficulty finding work, since there are fewer opportunities here than, for example, in the capital area,” she said.

According to Unnur Brá, 40 people were receiving financial assistance from the municipality this summer, 24 of whom had been supported for more than two years. That number is likely to rise quickly in the autumn, as many of the recipients had summer jobs.

The issue has been under discussion in Borgarbyggð for some time. In May last year, 126 people were reported to be receiving financial assistance from the municipality, including 105 Ukrainians living at Bifröst.

The total cost of the assistance was then about 27 million Icelandic krónur per month. Borgarbyggð estimated that its net cost could reach between 150 million and 200 million krónur during 2025.

At the time, 305 residents were registered at Bifröst, including 228 Ukrainian citizens. Many needed financial assistance to cover their rent.

One reason the costs are increasingly falling on the municipality is that the state reimburses municipalities for financial assistance during the first two years after refugees arrive in Iceland. After that period, the cost falls to the municipality where they live.

Borgarbyggð’s council says the municipality cannot solve the issue alone and wants more government bodies involved. It has asked for the working group to include the ministry and Borgarbyggð, as well as the Association of Local Authorities in Iceland and other ministries and agencies the ministry considers relevant.