300 thousand is the minimum

It is necessary to ensure that the elderly and disabled receive a minimum payment of 300 thousand within 3 years. The government should take the full step and guarantee this minimum subsistence to this group.

Reduction of deductions

The Framsókn and Independence Party government prioritised reducing the deductions faced by benefit recipients in the last electoral term. Already in the summer of 2013, the rule was abolished that pension fund income reduced basic pension. The tax-free allowance for employment income of pensioners and disabled people was increased. The tax-free allowance for pension fund income was increased. The agreement on the interaction of public and pension fund benefits was extended. The reduction rate of income guarantee was lowered to 38.35% on 1 January 2014. This means that benefits are now 7.4 billion ISK higher per year than they would otherwise be.

Benefits increase retroactively

The actions related to the public insurance system this year and next mean that benefits will increase by 14.2 billion ISK on 1 January 2016, which is an increase of 9.7%. Included in this figure are 3.9 billion ISK which is a retroactive increase due to the average development of wages during the year. This increase is in addition to the 4.3 billion ISK which the elderly and disabled received in January 2015. In total, the increase in funds due to the average wage development in 2015 amounts to 8.2 billion ISK. The increase in benefits to the elderly and disabled from January 2015 – 2016 is therefore a total of 18.5 billion ISK.

26.8 billion increase

In total, the actions during the electoral term mean that benefits next year will be 26.8 billion ISK higher than they would otherwise have been. That is 26.8 billion ISK that goes directly to the elderly and disabled, a total increase of 17.1%. In the final budget of the last government, the total funding for public insurance amounted to 77 billion ISK. In the current government's budget, the total funding amounts to 103 billion ISK.

A lot has been done, but we must continue to accelerate. That is why government MPs reiterated in their parliamentary work this morning that the government should ensure that the elderly and disabled receive a minimum payment of 300 thousand within 3 years.

Elsa Lára Arnardóttir and Silja Dögg Gunnarsdóttir The article appeared on visir.is on 11 December 2015.