Budget cuts at the Expense of the Unemployed
10. September 2025Cutbacks at the Expense of the Unemployed
The government intends to shorten the unemployment benefit period from 30 months to 18 months and tighten eligibility requirements. The proposed cuts are expected to save around ISK 6 billion annually.
Representatives of the labour movement emphasize that labour force participation in Iceland is already among the highest within the OECD and unemployment remains low. There is therefore no pressing need to reduce workers’ rights. On the contrary, more resources are needed to support people back into employment, rather than undermining the income security of those who lose their jobs.
These changes are in reality cutback measures disguised as reforms, taken unilaterally without consultation with the social partners. The joint work previously carried out by representatives of workers and employers has been disregarded.
ASÍ and BSRB strongly oppose these plans, stressing that the labour movement will not stand by while fundamental rights of workers are being eroded.