Morgunblaðið reports widespread misuse of Icelandic welfare payments

Morgunblaðið reports that municipal support, unemployment benefits and disability payments are being systematically misused by some foreigners who settle in Iceland without having contributed to the society.

Municipal subsistence support is intended as an emergency measure for people unable to earn income by other means. Documents obtained by Morgunblaðið indicate that the payments are being misused on a significant scale, while oversight appears to be failing.

Reykjavík City paid 2.633 billion Icelandic krónur in subsistence support last year to 2,591 people. The state reimburses the city for part of the financial assistance, but Morgunblaðið says it is the authorities’ responsibility to ensure that public funds are used properly, regardless of whether the money comes from municipal or state taxpayers.

Morgunblaðið reported on Thursday that two defendants in the so-called Höfðatorg case had mainly been supported by municipalities since arriving in Iceland. One had received municipal support exclusively, while the other had received it continuously since arriving in 2020, apart from approximately one month when he earned wages. Their municipal support amounted to more than 10 million krónur.

A recurring pattern

Although most foreigners who move to Iceland become active participants in Icelandic society, documents obtained by Morgunblaðið point strongly to widespread and substantial misuse of various welfare payments. The newspaper says the pattern is clear and that requirements for foreigners receiving public support and benefits appear to be less demanding than in comparable countries.

The most common pattern is for people to begin receiving municipal subsistence support. In some cases, they remain on the support for years without ever obtaining other income. Others receive municipal support for a period before moving, often after about three years, to payments from the State Social Security Institute. These payments are either sickness or rehabilitation pensions, or disability benefits.

Women of childbearing age may also receive payments from the maternity leave fund.

The following are a few examples from hundreds of similar cases about which the newspaper has been informed.

Examples of alleged misuse

A woman in her forties who came to Iceland from Somalia in 2020 has received subsistence support from Reykjavík City ever since. She now has five children and also received payments from the maternity leave fund for a period. During the past three months, including September, she has received payments from the State Social Security Institute in addition to municipal support.

The woman has never worked in Iceland’s labour market but has received more than 23 million krónur directly from public funds over nearly six years. This excludes child benefits, which are not taxable income.

A man in his forties arrived in Iceland from Palestine in 2021. He received municipal subsistence support from two municipalities during his first four months in the country. Payments from the State Social Security Institute then followed.

He has received more than 24 million krónur from public funds over more than four years without ever working in Iceland’s labour market.