Benefits regarding accidents at work and occupational diseases

The exception of foreign nationals who hold official positions with foreign states and the foreign staff of such officials. Work aboard an Icelandic vessel or aircraft or a vessel or aircraft owned or operated by an Icelandic party is equivalent to work in Iceland if the salaries are paid in Iceland. Self-employed persons are also insured.

Those engaged in household work may voluntarily ensure their entitlement to occupational injury benefits with respect to such work by making a request to such effect on their tax return at the beginning of each year.

Qualifying conditions

Occupational injury insurance covers accidents in the course of work, apprenticeship, and rescue work, as well as all forms of athletic training, exhibitions and competition with a recognized athletic club under the supervision of a trainer. 

To be covered the accident must be caused by a sudden extraneous, external event. 

The insurance also covers diseases caused by the noxious effects of substances, radiation or similar conditions which prevail at most for a few days and which can definitely  be attributed to the employment relevant to the case.

The accident must happen on the work premises and in connection with the work.  The work must be carried out for remuneration. 

A person is regarded as being at work when he/she is on the work premises at a time when he/she is meant to be working as well as during meal and coffee breaks and when on errands on behalf of the enterprise or when he/she is on necessary journeys to and from work.


The insurance comprises medical assistance, per diem cash benefits, invalidity benefits and death grants. Benefits must be claimed within one year from the accident.  It is possible to grant benefits when more than one year has elapsed since an accident occurred if the circumstances are so clear that such a delay does not obstruct the collection of evidence relevant to the case.

Medical assistance

If an occupational injury results in sickness or loss of working capacity for ten days or more, the necessary costs of treatment are covered by the insurance.

Per diem cash benefits

Per diem cash benefits (slysadagpeningar) are payable from and including the 8th  day following an injury, provided the injured person has been unable to work for at least 10 days.  The per diem benefits are paid until the injured person is able to work, is adjudged to be permanently disabled or until death, but in no case for more than 52 weeks.  The cash benefits are flat-rate benefits but payments must never exceed ¾ of the remuneration received for the work at the time of the accident. 

Employed persons are entitled to continued payment of wages and salaries for a certain period in case of accident at work according to collective agreements. Cash benefits from Icelandic Health Insurance are not granted until wages have ceased.

Invalidity benefits

If an injury results in permanent disability, 75% or more, the injured person is entitled to a full invalidity pension. Payments for permanent invalidity below 75% are paid in proportion to the percentage of invalidity. If the loss of capacity is less than 50% Icelandic Health Insurance may pay a lump sum invalidity benefit equivalent to a pension for the person concerned for a given number of years.

Death grants

If an injury results in death within two years from its occurrence, death grants are paid (dánarbætur vegna slysa) according to specific provisions.

A widow/widower receives a monthly grant for eight years. A pension is paid for each child. Benefits are also paid for disabled children over 16 who were dependent on the deceased when the injury occurred, depending on the extent to which the child was supported by the deceased.

Application for benefits

On the occurrence of an accident which is considered to make the insured eligible for benefits under the occupational injury insurance the employer, or in the absence of an employer, the insured person, should immediately report the incident to the Chief of Police or his representative (in Reykjavík directly to Icelandic Health Insurance) in the form prescribed. The Chief of Police forwards the report to Icelandic Health Insurance together with all necessary information.  Failure to report the injury by the person whose duty it is to do so does not debar the injured person or his surviving relatives from claiming benefits if this is done within one year from the accident. Benefits may be paid even when more than one year has elapsed if circumstances are so clear that the delay does not obstruct the collection of evidence.


The cost of occupational injury insurance is borne by state revenues generated through collection of a social security contribution (payroll tax), premiums and an annual contribution allocated in the State Budget.

Death grants

There is no statutory funeral or death grant but social assistance is provided when a person resident in Iceland is widowed before reaching the age of 67. He or she may then be paid an allowance (dánarbætur) for six months following the spouse's death.

If the recipient maintains a child under the age of 18 or in other special circumstances he/she may be paid an allowance for a further period.

This allowance is in accordance with the Social Assistance Act.




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