In the event of childbirth

The calculated compensation rates compare the income level from receiving parental benefits with the income level from work for single parents. In the graph below, the income level corresponds to 75% of the average wage in the private sector. To reflect differences in the size and composition of a household, the calculation is equivalised by weighting household members according to their age and their status in the household. 

Faroe Islands provide the highest compensation rate of parental benefits for a single parent with a newborn child. Due to other benefits such as child allowance, housing benefits and maintenance support, Denmark and Norway also have some of the highest compensation rates when comparing to lower income levels (AW50, AW75).

Both in the Faroe Islands and in Denmark the compensation rates have decreased since 2019. This is because the parental benefits have not been regulated at the same rate as the wages.

In all the Nordic countries, the parental benefits increase with the income level. In Denmark the parental benefits only increase between AW 50 to AW 75. Thus, Denmark along with Sweden have the lowest compensation rates for the higher levels of income.

See calculations for single parents relative to other income levels here.

The income loss couples face when having a child is bigger for the first child, compared to when couples have other children already. This is the case for all countries and all income levels. One explanation is that a larger part of the income is intact, due to the existing child allowances, for the couples who have other children. In Sweden and Iceland, the expenses for couples with multiple children are reduced when having an additional child, because children are not entitled to payable childcare or after-school care when a parent has parental leave.

See the section Daily cash benefits and parental leave, for more specific information on rules in each of the Nordic countries.

The calculated compensation rates shown in the two graphs for couples compare the income level from receiving a parental benefit with the income level from work. The income levels used in the comparison corresponds to 75% of the average wage in the private sector for the parent on benefit and 100% of the average wage for the other parent. To reflect differences in the size and composition of a household, the calculation is equivalised by weighting household members according to their age and their status in the household.

The Faroe Island and Norway provides the highest compensation rates in for both couples with and without other children. 

The different compensation rates for the Nordic countries in the case of childbirth do not differ as much for couples, as they do for single parents.   

[See calculations for couples relative to other income levels here]