ALS builds reserves to 1.7 billion kroner

The Faroe Islands’ unemployment insurance scheme ALS recorded a surplus of 191 million kroner last year, bringing its total equity to more than 1.7 billion kroner, KVF reported.

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

According to its annual report, ALS could withstand unemployment of 6 percent for nine years or 8 percent for five to six years before becoming insolvent.

Contributions from employees and employers totalled 207 million kroner last year. Payments were just under 70 million kroner, including 16.8 million kroner from the fish-processing scheme.

The unemployment rate was 1 percent last year, with an average of 311 people fully unemployed.

About 1,000 people are connected to the fish-processing scheme, which guarantees them a 32-hour working week when there is little or no work at the processing plant where they are employed.

At the beginning of this year, the ALS contribution rate was reduced from 0.8 percent to 0.6 percent. 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.

ALS said in its annual report that unemployment in the Faroe Islands may be the lowest in the world. It found only four countries with lower rates: Qatar at 0.2 percent, Cambodia at 0.3 percent, Niger at 0.4 percent and Thailand at 0.8 percent.

“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 wrote.

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