Unemployment insurance on the Faroe Islands

Unemployment insurance – the ALS scheme

The Faroese unemployment insurance – the ALS scheme – is managed by an independent fund and financed by all employers who pay wages, and wage-earners, who are between the ages of 16 and 67 and are fully liable for tax payments on the Faroe Islands, each paying 1 per cent of the paid or received wages to the insurance scheme. Independent persons and other special groups are not automatically insured through the scheme but may choose to take out insurance.

The contribution to unemployment insurance is made automatically via tax contributions. This also means that notification to the scheme is automatic.

In the case of wage-earners who are linked to the fisheries industry on land, there is a special scheme in connection with payments from the scheme. This arrangement means that unemployment daily allowance is paid in the event of a temporary loss of work in special cases. Contact ALS for further details.

The unemployment scheme also comprises a job referral system whereby work is referred to unemployed persons who receive support from the scheme. You can also be given details of work throughout the country and without reference to vocational branches. In other words, if you receive unemployment daily benefits you must be willing to accept any work for which you have the vocational skills.

Unemployment daily allowance

Payment of unemployment daily allowance is based on the average earned income over the previous 12 months and therefore there is no membership or period of employment requirement. The highest level of benefit payment corresponds to 70 per cent of an unskilled worker’s wage. No supplement is paid for children.

The total day allowance period is 798 days within a 5-year period after which you are not entitled to daily allowance during the next 24 months.

Job-seeking in another Nordic country

If you move from another Nordic country to the Faroe Islands, your qualifying period in the unemployment insurance can be transferred to the Faroese unemployment insurance. Contact the unemployment insurance in the country you are leaving.

If you travel to the Faroe Islands in search of work you will normally be able to receive unemployment daily allowance from the country you are leaving for a period of 2 months. Read more here (link).

Note that special rules apply within the United Kingdom of Denmark between Denmark, the Faroe Islands and Greenland. You cannot therefore take with you unemployment daily allowance within the United Kingdom of Denmark. Contact your unemployment insurance to find out more details of the possibilities if you wish to look for a job in another country within the United Kingdom of Denmark.