Interior Minister Ólöf Nordal has expressed her agreement with Prime Minister Sigmundur Davíð Gunnlaugsson and the Interior Ministry’s task force, that the State Treasury shall “pay back” an amount of ISK 660 million (around €4 mi) to the State Church. The task force says that this is the total amount by which the religious institute’s budget decreased after 2008, over and above the budget cuts suffered by other public institutes. This was reported by RÚV.

According to the Interior Minister, members of the government agree that “addressing the needs of the Church”. She says that the institute has in recent years undergone severe cutbacks. “That is something all the nation’s institutes have had to face. Not least those within this ministry. But I want to express my wholehearted agreement with the Prime Minister that at this point in time it is important to pay special attention to the Church,” the minister said.

Asked about Church properties, such as land plots and buildings, and whether selling any of those had been considered, the Minister said that was a specific issue to be dealt with separately, and refused to comment further.

Asked whether other institutes should expect similar reimbursement, the Interior Minister spoke vaguely, in general terms, about conditions incrementally improving.

Asked whether the Church has special priority, the Minister replied: “It is a highly important institute in society. No doubt. And I hold it in very high esteem.” Later in the interview, the Minister reinstated that “the Church is held in very high esteem here”, presumably referring to the Ministry, and emphasised that this issue, a budget increase, introduced as a reimbursement, will be prioritized within the Ministry.

The task force proposed that the amount would be paid back over four years. The government’s actual implementation has not been announced. The amount would be added to the ISK 4 billion (ca €25 mi) which the Church receives from the State Treasury this year. Almost half of that amount is labelled as “parish fees”, defined as a percentage of income tax which the State collects and mediates to the Church.

In 2012, the United Nations Human Rights Committee (UNHRC) noted this, the “church tax”, as among principal matters of concern, urging Icelandic State authorities to “take steps to ensure that the church tax is not levied indiscriminately”.

As reported, Prime Minister Sigmundur Davíð has stated that he asked Bishop Agnes M. Sigurðardóttir to write him a letter and request a budget increase, which the bishop did. Sigmundur Davíð reasoned that the Church had shown great self sacrifice in recent years, while contributing to the reconstruction of the economy. The Minister did not further explain how. It has since caught attention that the Prime Minister’s economic advisor is the Bishop’s son. No such relations have, however, been reported between the Interior Minister and clergy.