Parents that have been employed for six months or longer in Iceland are entitled to paid leave when a child is born, at adoption or permanent foster of a child younger than eight years old. Parents either receive vacation payment or birth grants from the Maternity and Paternity Leave Fund but that depends on their status on the labour market. It is recommended that people continue to pay dues to their union during maternity/paternity leave. If that is not done they lose the rights which the person has with their  trade union.

Those who have earned rights in a state which is a member of the EEA agreement can in many cases transfer their rights to Iceland. A parent must then attach the required certificates regarding periods worked and insurance periods to the application. Those who are not employed are entitled to a birth grant if they have lived in and had a legal residence in Iceland for twelve months or longer.

Information on maternity/paternity leave, birth grant and parents' leave can be found on the Maternity and Paternity Leave Fund's website (