Policy responses for Iceland - HSRM


Policy responses for Iceland

6. Measures in other sectors

6.1 Measures in other sectors

Many MEASURES IN OTHER SECTORS beyond the immediate scope of the health system are being taken to prevent further spread of the virus. This section contains information on many of these areas, including border and travel restrictions and economic and fiscal measures, among others.

On January 12, 2021, Children entering the country were required to enter quarantine as from January 13th. A new regulation on quarantine, isolation and testing at Iceland’s border to combat COVID-19 that has been issued by the Minister of Health. The regulation, which was proposed by the Chief Epidemiologist, has been sent for publication in the Government Gazette. It took effect as from 13 January 2021 and remained in force until 31 January. Under this new regulation, children born in 2005 or later are required to go into quarantine along with their parents or guardians after entering Iceland. In his memorandum to the minister, the Chief Epidemiologist noted that while the COVID-19 pandemic has been relatively well contained within the country, it has surged in most other countries recently, largely due to the emergence and spread of a new strain that was first identified in Britain.

On January 15, 2021 a decision was made at the Cabinet meeting which introduced mandatory screening on the border. From January 15th all passengers must undergo a PCR test upon arrival in Iceland, followed by a 5–6-day quarantine and a second screening at the end of quarantine period. This procedure will remain in place until 1 May, when cautious steps will be taken to ease restrictions, based on the epidemiological situation at passenger's point of departure. The decision by the Government is a continuation of the procedure that has been in place since 19 August when the system of double screening was established. The option to choose a 14-day quarantine instead of screening will however be removed. Less than one percent of arriving passengers has opted for that option in recent weeks. These changes are in line with recommendations by the ECDC and the Chief Epidemiologist of Iceland, whose assessment indicates that there is considerable risk of new infections "leaking" through the border, especially from individuals who choose to not be tested at the border. It is especially important to minimize the risk of new variants of the virus spreading in Iceland, but these have repeatedly been detected and stopped at the border.

Arriving passengers who are in possession of valid documentation that proves prior infection or vaccination against COVID-19 are exempt from all screening and quarantine measures. Currently, only positive PCR-tests and certificates of presence of antibodies against SARS-CoV-2/COVID-19 from a laboratory within the EEA/EFTA-area or a confirmation from the Chief Epidemiologist in Iceland are accepted. All those who present a valid international vaccination certificate for full vaccination with an approved vaccine against COVID-19 are exempt.

After 1 May the border measures will be based on the regularly updated data published by the European Centre for Disease Prevention and Control. Countries will be risk-assessed into green, orange, and red zones according to the epidemiological situation.

On February 19th further restrictions on the border were introduced to the Icelandic cabinet by the Minister of Health earlier today and approved by the Cabinet. The stricter measures were based on recommendations by the Chief Epidemiologist. The new border measures came into force on February 19th, requiring all arriving passengers in Iceland to present a negative PCR taken within 72 hours of the time of departure to Iceland. This requirement is in addition to the current system of double screening, that also requires all arriving passengers to submit to a PCR test upon arrival, followed by a 5-day quarantine and a second PCR test. Those who provide valid proof of having been vaccinated against COVID-19 are not required to provide a PCR test prior to boarding and are also exempt from screening and quarantine measures at the border. The same applies to those who can provide proof of prior infection.
The new regulation on border measures also included provisions requiring individuals to isolate in managed isolation facilities (quarantine hotels) if the first border test is positive and the infected individual is unable to provide credible plans for self-managed isolation. The requirement for isolation in a managed facility may also apply to individuals who are infected with virus strains that are classified by the Chief Epidemiologist as particularly worrisome in terms of contagion and morbidity.

To sum up the Cabinet´s decisions:
i. Double screening for all arrivals remains in place
ii. Those who test positive in first screening may be required to isolate in a managed facility
iii. Temporary measures at border are intended allow speedier loosening of domestic restrictions
iv. Those who provide valid proof of vaccination are not required to provide a PCR-test prior to boarding and are also exempt from screening and quarantine measures at the border
v. Iceland will implement a new system, based on the ECDC colour scheme on 1 May.

Government of Iceland January 12th 2021. News, Ministry of Health. COVID 19: Children entering Iceland required to enter quarantine as from 13 January. https://www.government.is/news/article/2021/01/12/COVID-19-Children-entering-Iceland-required-to-enter-quarantine-as-from-13-January/ 
Government of Iceland January 15th 2021. News, Ministry of Health, Prime Minister´s Office, Ministry for Foreign Affairs. COVID-19 screening mandatory for arriving passangers until spring. https://www.government.is/news/article/2021/01/15/Covid-19-screening-mandatory-for-arriving-passengers-until-spring/ 
Government of Iceland February 16th 2021. News, Ministry of Health, Prime Minister´s Office, Ministry for Foreign Affairs. Travelers required to present negative PCR test before boarding. https://www.government.is/news/article/2021/02/16/Travelers-required-to-present-negative-PCR-test-before-boarding-/

Travel restrictions

On May 12th, the government of Iceland announced that it expects to start easing restrictions on international arrivals no later than 15 June 2020, while from 15 May some professionals arriving in Iceland including scientists, filmmakers and athletes will be eligible for a modified quarantine. The exact details of the revisions will be decided by the Government’s multisector working group, however it is expected travellers may choose between a undergoing COVID-19 diagnostic test or a two-week quarantine. 

New regulations regarding the current restrictions on the border are forthcoming, as the current regulation announced on August 14 will expire on September 15 (see 1.2 Physical Distancing)

Economic measures
A package of fiscal measures of ISK 230 billion krona (7.8 percent of GDP) has been submitted to parliament to ease the strain on households and firms and, looking forward, to help the economy recover. Key measures to support households and firms include tax cuts, tax deferrals, increased unemployment benefits, one-off child allowances, support to companies whose employees have been quarantined, and state-guaranteed bridge loans to companies. Key measures to restart the economy (1.1 percent of GDP) include public investment, tax incentives for real estate improvement, temporary tax relief for the tourism sector, and marketing efforts to encourage domestic tourism.

More specifically, (first) the Government of Iceland is taking unprecedented measures in response to COVID-19 in order to secure wages of quarantined individuals, which is key to supporting people to make responsible decisions to reduce the spread of the virus.
Second, to protect jobs and employment relationships between Icelandic workers and their employers during these extraordinary times, the Government of Iceland has committed to allowing part-time workers to claim up to 75 per cent of unemployment benefits, to avoid job losses.

Third, companies will be allowed to postpone the payment of taxes until 2021 to improve liquidity in business operations. Hotel taxes will be abolished until the end of 2021. Reductions in bank taxes and state guarantees on loans to eligible companies are designed to increase the opportunities for lending, allowing companies to continue business and protect salary payments.

Fourth, during the next 15 months, individuals can withdraw a monthly sum from their voluntary pension savings, to a maximum of ISK 800,000. VAT reimbursement for construction and maintenance work will increase from 60% to 100%. In addition, the VAT reimbursement provision will be extended to the third sector organisations including charities and sports associations.

Fifth, a one-off child benefit payment will be made on June 1, 2020 to all families with children under the age of 18. Parents with an average monthly income below ISK 927,000 in 2019 will receive ISK 40,000 per child and those with higher income will receive ISK 20,000 per child.
Finally, this year, the Government of Iceland, along with local municipalities, will initiate a special project, aimed at increasing investment, ISK 20bn investment initiative, in transport, public construction and technology infrastructure. Government contributions to research and science will also be increased. Details of this project will be announced at a later date.

On March 31st the parliament, approved and passed the government bill presented to the parliament in response to the economic impact of the COVID-19 pandemic.

These broad-based measures complement the Central Bank’s decisions to lower interest rates, minimum reserve requirements, and countercyclical capital buffers.

The Central Bank of Iceland (CBI) has provided monetary support and has taken measures to preserve financial stability. Since the outbreak, the Monetary Policy Committee (MPC) has cut policy rates (interest rate that has the strongest effect on short-term market rates) by 100 basis points to 1.75 percent and reduced deposit institutions’ average reserve requirements point to 1 from 2 percent to ease their liquidity positions by about 1 percent of GDP. The CBI Financial Stability Committee reduced the countercyclical capital buffer from 2 percent to 0 percent, providing scope for banks to increase lending by ISK 350 billion (12 percent of GDP).

November 20th 2020: The Government has decided to pay a special supplement over and above basic unemployment benefits next year, so as to support the large group of people whose income-linked unemployment benefits will expire in the next few months. The 2.5% supplement will be paid in addition to the 3.6% increase provided for in the 2021 fiscal budget proposal. With these increases, which total 6.2%, basic unemployment benefits will equal ISK 307,403 per month.
Increased payments for support of job-seekers’ children will be extended through the end of 2021, with a 6% supplement added to basic unemployment benefits for each child instead of the previous 4%. Moreover, a December supplement of just over ISK 86,000 will be paid to confirmed job-seekers.

Resilience subsidies will help society to be better prepared for the time when global economic activity opens up again. The resilience subsidies are a direct continuation of the revenue loss subsidies. They are intended to help companies maintain a minimum level of activity while the impact of the pandemic persists. The measure applies to all taxable entities that suffer at least a 60% loss of revenue, irrespective of their operational form. It applies as well to sole proprietors who conduct business activities under their own national ID number.

For entities suffering revenue losses between 60% and 80%:
• The maximum subsidy ranges up to ISK 400,000 per monthly full-time position equivalent
• Capped at ISK 2 million
For entities suffering revenue losses between 80% and 100%:
• The maximum subsidy ranges up to ISK 500,000 per monthly full-time position equivalent
• Capped at ISK 2.5 million

The subsidy amounts are based on operating expenses but may not exceed the amount of the revenue loss during the period in question.
In the case of substantial revenue losses suffered by sole proprietors or very small businesses whose operating expenses consist largely of their estimated salary, the entity is authorised to base operating expenses and the number of full-time position equivalents on figures from the same month in 2019.

Support for families with children:
The means testing threshold in the child benefits system will be permanently raised, thereby ensuring that it changes with developments in the lowest wages in the labour market. This change will ensure that single parents with two children and a monthly income of ISK 350,000-580,000 will receive an annual increase of ISK 30,000 in child benefits, and that for a family whose combined monthly income is ISK 700,000-920,000, child benefits will be ISK 60,000 higher than they would be otherwise.

Support for disability pensioners and vulnerable groups:
A one-time payment of ISK 50,000 will be made before December 18th to recipients of disability and rehabilitation pensions who are eligible for pensions during the year in addition to the December supplement that is usually paid during the month. At the beginning of 2021, permanent changes will be made to the disability pension system. Internal reductions will be scaled down, and the lowest-paid disability pensioners will receive a supplement of nearly ISK 8,000 per month in addition to the planned 3.6% increase provided for in the fiscal budget proposal. The total increase in social security benefits for the lowest-paid disability pensioners will therefore be nearly ISK 20,000 at the turn of the year.

In addition, a range of mitigating measures will be adopted so as to strengthen vulnerable groups during the pandemic, and a response team on households’ financial position will be established. Members of the response team will include representatives from financial institutions, stakeholder groups and the Debtors' Ombudsman.

The Government of Iceland, Ministry for Foreign Affairs and Ministry of Justice,    https://www.government.is/news/article/?newsid=6171aeaf-6ac9-11ea-9456-005056bc530c
The Directorate of Immigration March 23rd 2020. Travel restrictions to Iceland and 14-day quarantine for all residents. https://www.utl.is/index.php/en/about-directorate-of-immigration/news/1085-travel-restrictions-to-iceland-and-14-day-quarantine-for-all-residents  
The Government of Iceland March 14th 2020. Icelanders advised not to travel abroad. https://www.government.is/news/article/?newsid=93a4347b-6605-11ea-945f-005056bc4d74
Directorate of Health April 1st 2020, Instructions for ports and vessels. https://www.landlaeknir.is/utgefid-efni/skjal/item39946/
IMF April 2020, Key Policy Responses as of April 8th 2020: Fiscal https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19#I
Althingi 2020 (Icelandic Parliament). Act no. 25/2020 on amendments on variouse acts in order to meet the economic impact of the pandemic causedby the coronavirus, https://www.althingi.is/altext/150/s/1206.html
Government of Iceland, Icelandic Government annouces 1,6bn USD response package to the COVID-19 crisis, March 21st 2020  https://www.government.is/news/article/2020/03/21/Icelandic-Government-announces-1.6bn-USD-response-package-to-the-COVID-19-crisis/
IMF April 2020, Key Policy Responses as of April 8th 2020: Monetary and Macro-Financial, https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19#I

Travel restrictions
There are no particular border restrictions in Iceland, such as a mandated quarantine for those tourists entering the country, or area lock downs. However, the Government implemented travel restrictions prohibiting unnecessary travel to the Schengen Area and the European Union on March 20th.Icelanders were advised not to travel abroad and those who were abroad were advised to consider an early return. There are no restrictions on transport of good to or from the country. On April the 1st instructions were given to all ports and vessels, all port employees and first responders of all ports regarding quarantine and precautions against infection.