Rules on the repayment of contributions to foreign citizens

1) Repayment of contributions to citizens in countries of the European Economic Area (EEA) is not permitted. These countries are:

  • EFTA-countries: Iceland- Liechtenstein - Norway - Switzerland (not a member of EEA).
  • EU-countries:
    Austria - Belgium - Bulgaria - Croatia - Czech Republic - Cyprus (the Greek part) - Denmark - Estonia - Finland - France - Germany - Greece - Holland - Hungary - Ireland - Italy - Luxemburg - Latvia - Lithuania - Malta - Poland - Portugal - Romania - Slovak Republic - Slovenia - Spain - Sweden - United Kingdom.

2) A fund member with citizenship within the EEA at the time when payments took place has no right to a repayment of contributions.

3) A member with double citizenship, one within the EEA, has no right to repayment of contributions.  

4) In cases where a foreign citizen has the right to repayment of contributions, the following rules shall apply:

  • If the period of contribution payment is less than three years, so that the right to a current valuation of disability benefits has not been established, the foreign citizen shall recover both his own and his employer's contribution.

  • If points have been accumulated for more than three but less than five years, thus establishing the right to a current valuation of disability benefits, the proportion of recovery shall be based on the following table of the Association of Icelandic Actuaries, where the age of the foreign citizen at the time of recovery is of main importance. 
     

Table from the Association of Icelandic Actuaries

Age range   Repayment ratio 
 - 29  100%
 30-34     95%
 35-39  90%
 40-44  85%
 45-49  80%
 50-59   75%
 60-64  80%
 64 -  85%

 Age is based on the time of repayment.

  • Points for those years that do not grant a right to a current valuation of disability benefits shall be repaid without a deduction in respect of insurance risk.

  • Points accumulated after this period are multiplied in accordance with the above table of the Society of Icelandic Actuaries. 

Department B and LH
If the period of contribution payment is less than five years the foreign citizens shall be repaid both his own contribution as well as the counter-contribution of his employer.

Departments A, B and LH
If the period of contribution payment exceeds five years, the repayment shall be in accordance with the assessment of the Fund's actuary. 

5) Repayments are always calculated with reference to the consumer prices index, i.e., repayment is based on the number of SAL-index points accumulated by the member. Repayments do not carry interest. 

6) An application for repayment shall be accompanied by:

  • A confirmation from an employer of the termination of employment.
  • A copy of a passport.
  • A copy of or confirmation of a passenger ticket.
  • The number of an Icelandic bank account.

 7) Taxation shall be handled in accordance with rules that apply to the repayments of contributions. In cases of such repayments, the sum is subject to personal income tax.


Please note that in order for the reimbursement to take place, the applicant must turn in a confirmation of a permanent residence from one's native country approximately 3 months after submitting the application. Should all documents be sufficient at that time, the applicant will receive the reimbursement.

Application