As mentioned earlier the Icelandic educational system is based on inclusive education – Education for All. Inclusion means enabling all pupils to participate in the life and work of mainstream institutions to the best of their abilities, whatever their needs. Inclusive education means disabled and non-disabled children and young people learning together in ordinary pre-school provision, schools, colleges and universities, with appropriate networks of support. This is clearly stated in the Icelandic Educational Acts for the different school levels. Earlier standpoints focused upon prerequisites for inclusion but now the focus has shifted to the need to justify considering segregated options for pupils.

A child/young person has the right to special needs education if the parents, teachers and the schools specialist team agree that a certain special needs education provision is appropriate at any given time. The head teacher is expected to initiate the provision in co-operation with the parents. If there is a disagreement about the provision the case is referred to the local authority for decision. In the Regulation on Special Education for Compulsory Schools (1996), special education is defined as teaching that is significantly different in objectives, content, teaching situation and/or methods from the teaching that other children of the same age are offered. Special education is planned for a longer or shorter period according to the pupil's needs and, when required, for the complete duration of the child’s school attendance. Special education can take place within or outside the mainstream classroom, in a special class or in a special school.

Special education means among other things:

- The writing of an education plan for an individual or a group of individuals. The plan is based on information and observation of the pupil's whole situation and the assessment of the pupil's schoolwork and mental and physical development. Both long-term and short-term plans for the pupil's education are to be made.
- Implementation according to the plan.
- Written reports and evaluation of the education plan and the teaching of it.
Special education is not seen as separate from other teaching, special education is one way of teaching children/young people and can be interpreted within a continuum.

For all levels of education i.e. from pre-school through upper secondary school the Education Acts state that children/young people with handicaps and/or SEN are to attend the same schools as children/young people without handicaps and/or SEN.
In the Icelandic report from the World Education Forum in Dakar (2000) there is more information on the situation in Iceland and an action plan for the Education for All policy until 2015.

See: http://bella.mrn.stjr.is/utgafur/Dakarskyrslensk.pdf