UPDATED 12 December 2009: Icelandic parents-to-be look unlikely to have their maternity/paternity pay cut as had been feared. And it now seems the final month of their leave period is not to be suspended for three years either.
The government’s initial idea was to lower the limit on parents’ maternity/paternity pay from ISK 350,000 a month down to 300,000 and to stipulate that payments be no higher than 75 percent of parents’ standard working wage instead of the current 80 percent. This proposal proved unpopular with the public.
The next idea, according to Visir.is, was thought to be to reduce new parents’ leave by a month, which they would then save for three years and take when their child turns three – but Althingi’s Society and Social Insurance Committee has ruled this out. It therefore remains unclear how the government is going to save the ISK 1.2 billion on parental leave it needs to in 2o1o.