More cutbacks planned by Icelandic government

Iceland’s finance minister says that the country’s debt situation is no worse than in neighbouring countries and better than many. Despite this, next year’s budget includes cuts to both maternity/paternity leave and child benefit.

The parental leave fund aims to spend a billion kronur less next year. Plans to achieve this include shortening the period of legally ensured maternity/paternity leave and decreasing the maximum pay-out from the fund. There are, however, also plans to increase payments to the parents with the very lowest wages.

At the same time, the government wants to make further savings on child benefits for children seven years and under. The ISK 60,000 (USD 531) part of the benefit which is not linked to the parents’ wages will be abolished.

A couple whose combined monthly wages are ISK 190,000 will receive ISK 154,000 a year instead of the current ISK 194,000. Parents with a combined monthly income of ISK 250,000 will not receive extra payments at all.

These money saving plans were revealed yesterday on the same day as Steingrimur J. Sigfusson assured journalists that Iceland’s sovereign debt is very much comparable to neighbouring countries and actually better than the UK and the Republic of Ireland. He also pointed out that Icelandic unemployment is not above the OECD average.

(Sources: RUV and

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