Iceland has yet to set rules for one-off interest benefits

The government has not decided how one-off interest benefits would be distributed, and special legislation would be needed to make the payments, mbl.is reports, citing a response from the Prime Minister’s Office.

The benefits could be paid in 2028 under an agreement with VR, LÍV and Fagfélögin. The government has estimated that the payments could cost between 1.3 billion and 3 billion Icelandic krónur, depending on inflation.

The response said eligibility criteria would likely take account of both income and assets. It is not yet known which households would qualify or how many would receive support.

The response also said it would be premature to set criteria now, since the available tax-return data on income and assets relates to the previous year. The government considers it better to decide the criteria and other conditions closer to 2028, so the support reaches the intended groups.

As an example, if the average payment were 100,000 krónur per household, about 13,000 households could receive support if inflation exceeded 3.8% at the end of October 2027. The response gave an estimate of 20,000 households if inflation exceeded 4.0%.

The plan follows a 2024 stability agreement, when the previous government and the Association of Local Authorities announced measures to support wage agreements over the following four years. These included special interest support on top of ordinary interest benefits.