Questions and Answers

The VR Contingency Fund was established in 2006. Discussions about the fund and the general grant arrangement have regularly come up within the union in recent years, especially this spring during the elections for the Leader and Board of VR, when the Contingency Fund was widely discussed. Following this, the VR Board decided to consult with VR members on how they believe these matters should be handled, offering a choice between two options: the VR Contingency Fund and the traditional trade union grant system.

Yes, the result of the vote is binding for the union.

When would the new grant system take effect?

The new grant system would take effect immediately after the Annual General Meeting in 2026, or on March 26. At the same time, the sale of Icelandair gift certificates would be discontinued, and other changes would take effect, e.g. regarding parental grants, IVF grants from the VR Sick Pay Fund, and travel costs for specialist medical care.

How long do I have to use my balance?

All VR members with a balance in the VR Contingency Fund have two years to use their credit, starting from the 2026 Annual General Meeting. Balances in the VR Contingency Fund will therefore expire in full as of March 26, 2028, if not used before that time.

Will there be changes to what can be reimbursed or granted?

In total, payments were made from the VR Contingency Fund for 40 different services or products last year. In the traditional grant system, grants are not available for education or study materials, medical or dental services, medication costs, children's leisure activities, insurance, unemployment, loss of income due to illness or disability, fitness products, or medications, to name a few. See more details in the in-depth discussion about the fund.

Will there be changes to other grants, such as grants from the VR Sick Pay Fund?

Yes, there will be changes to grants from the VR Sick Pay Fund. It will be possible to apply annually for IVF treatment, ISK 70,000 each time, whereas the current IVF grant is ISK 250,000 and granted once per member. The grant for travel costs to see a specialist doctor, ISK 150,000 per year, will be discontinued.

Will there be changes to the sale of Icelandair gift certificates?

The sale of Icelandair gift certificates will be discontinued, but it will be possible to apply for a holiday grant to help pay for flights, ISK 25,000 per year. Such a grant is taxable.

Will the parental grant not be available?

The parental grant is not part of the VR Contingency Fund, but the VR Board has agreed to explore ways to offer VR members a parental grant if the vote results in continuation of the fund.

The proposal for a traditional grant system includes a parental grant of ISK 100,000 for VR members who have paid into VR for 12 months. This grant is taxable.

Will there be changes to the arrangement of the VR Contingency Fund afterward?

No, there will be no changes to the arrangement of the VR Contingency Fund.

Yes, income tax is not paid on fitness grants up to a certain limit, ISK 81,000 per year, and this applies to both payments from the VR Contingency Fund and the traditional grant system. Likewise, no income tax is paid on holiday accommodation grants up to a certain limit, ISK 76,000 per year, and costs for job-related education can be offset against such grants.

It is possible to receive up to ISK 120,000 in total grants from the traditional grant system per year. Each grant category has a maximum amount and usually a set percentage of the paid invoice. Thus, invoices are not reimbursed in full. It should also be noted that most grants are taxable, except for those related to fitness and holiday accommodation. There is no accumulation in the traditional grant system — if you do not use your grant entitlement within a year, it does not carry over to the next. Unused grants expire at the end of the year, and a new grant period begins at the start of each year.

In the VR Contingency Fund, around 4% of one month’s average salary from the previous calendar year is deposited annually at the end of March. The balance carries over between years, i.e., it is possible to accumulate deposits in the fund if they are not used. A member who has not used their balance for several years could therefore have a significant amount in the fund. It should also be kept in mind that most grants are taxable, with the exception of grants for fitness and holiday accommodation.

The main difference between the VR Contingency Fund and other trade union grant systems is the ability to accumulate — you can build up a balance in the VR Contingency Fund over several years, whereas in the traditional grant system, that is not possible. A payment is made into the VR Contingency Fund once a year, and if no withdrawal is made, the deposit remains in the fund and the next year’s deposit is added to the existing balance.

Contributions to the VR Contingency Fund are income-based, and approximately 4% of one month’s average salary for the previous year is contributed to the fund each March.

In the traditional grant system, the grant period is one year (the calendar year), and you do not accumulate entitlement or carry over rights from year to year. If a grant is not used within the year, it expires at year-end when a new period begins. The grant amount therefore does not increase based on unused grants from the previous year.

The standard grant system is not income-based when it comes to the payment of grants, but VR members with wages below the minimum wage according to the collective agreement between VR and The Confederation of Icelandic Enterprise receive a proportional grant, based on their wage ratio in relation to the defined minimum wage at any given time.

There will be no changes to vocational training funds or associated entitlements. The vote only concerns the VR Contingency Fund, grants from the VR Sick Pay Fund, and flight discount vouchers.

The entitlements of VR members in the vocational training fund will remain unchanged, regardless of the outcome of the vote.

All members with credit in the VR Contingency Fund have two years to use their credit, counted from the Annual General Meeting in 2026. Credit in the VR Contingency Fund will therefore expire in full as of March 26, 2028, if it has not been used by that time. This also applies to older members who have credit in the fund. Older VR members who are no longer in the labour market do not accrue the right to grants in the standard grant system, nor are contributions made to the VR Contingency Fund on their behalf.

An overview of the main entitlements of senior full members can be seen here.