In the event of childbirth

Parental benefits compensate for income that people do not get, while they are on parental leave.
The compensation payable to a single parent or parents receiving parental benefit differs somewhat between the Nordic countries.

Single parents

The calculated compensation rates compare the income level after receiving parental benefits with the income level from work for single parents. The income level compared is at 75% of the average wage in the graph below. The calculation is equalized with respect to the size of the family before and after birth to secure comparability.

Norway provides the highest compensation rate of parental benefits for a single parent with a new-born child. However, because of other benefits like child allowance, housing benefits and maintenance support also Denmark and Faroe Islands are among the countries with the highest compensations rates, at least when compared to the lower income levels (AW50 and AW75).

In all the countries, the parental benefits increase with the income level. In Denmark the parental benefits only increase between AW 50 to AW 75. Therefor Denmark together with Iceland and Sweden are among the countries with the lowest compensations rates for the higher levels of income.

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

Couples

The income loss when having a child is bigger for a couple having their first child compared to couples that already have children. 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 already having children. In Sweden and Iceland, the expenses for the couples with two children are also reduced, 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 after receiving parental benefit with the income level from work. The income levels compared is at 75% of average wage for parent on benefit and 100% of the average wage for the other parent. The calculation is equalized with respect to the size of the family before and after birth to secure comparability.

Norway provides the highest compensation rates in both cases, but the calculated compensation rates do not vary nearly as much between the countries relatives to the case with single parents.  

See calculations for couples relative to other income levels here.