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Who is entitled to receive state aid in Israel and how much will you receive?
During this CoronaVirus crisis, the state is helping Israel in many ways. But we still need to know where we stand.
Whether you're self-employed (Ossek mourche or Ossek Patour), an entrepreneur or an employee on unpaid leave, we take a look at the various forms of government assistance available in Israel.
Self-employed workers and employees in Israel find themselves bewildered by the assistance programs offered by the government.
Too many people are afraid of missing out on certain benefits to which they may be entitled. In fact, some grants have a time limit, or a deadline. If you don't apply on time, you run the risk of losing out.
Independent (Ossek mourche or Ossek Patour)
First grant :
Grant of up to 6,000 NIS - the opportunity to apply for this grant has ended.
2nd Grant :
Grant of up to NIS 10,500.
The subsidy is conditional on a 25% reduction in sales in March-June 2020, compared with sales for these months in 2019.
The application can be submitted via your personal space on the tax administration website until August 7, 2020.
Immediate subsidy (Prolongation or extension of the second grant) :
In July, a new subsidy was adapted.
It is based on the same conditions as the second grant. Just note that this time, the limit is 7,500 NIS (instead of 10,500 Nis). There's nothing to do to apply for this grant. Anyone who received the second grant at the beginning of May automatically also received this "extension".
3rd grant (small businesses) :
Is granted to small independent companies, with sales of up to 300,000 NIS. The subsidy is based on a 25% decrease in sales in March-April 2020 compared with March-April 2019. The application for this subsidy can be submitted in the personal area until August 7, 2020.
3rd grant (medium and large companies) :
This grant is a contribution to the company's fixed expenses of up to 400,000 shekels. Provided for companies in Israel with sales in excess of 300,000 NIS up to 20 million NIS.
There's been a change here recently, and two options have been opened up.
a) under the first option, which is also the option that has existed until now, the conditions for receiving the subsidy are a decrease of 25% in March-April 2020 compared with March-April 2019.
b) But, to make things easier for companies working on a cash basis, a new way of calculating has been introduced.
Under this "new method" of calculation, we check the decline in sales from March to June 2020 compared with the same period in the previous year. (The condition of a drop of at least 25% compared with 2019 remains in force).
Those who have already submitted the 1st application (explained in "a" above) and wish to switch to the new calculation system will be able to modify their application from August 14. Applications for this grant can be made until November 1, 2020.
Employment incentive grant
A subsidy of 3,500 or 7,500 shekels per employee, depending on when they return from unpaid leave. The grant application is submitted via the employment office website.
See also: Help for employers in Israel
What's coming up in the next few weeks?
The State of Israel is planning bimonthly subsidies until June 2021. These grants will be based on a 40% reduction in sales - compared with 2018 or 2019.
A reduction in property tax (arnona) is also planned for companies whose sales have fallen by 60%.
See also: Financial support plan for companies in Israel
Employees - unpaid leave - unemployment
- Unemployment benefits have been extended until August 16, 2020, even for those whose entitlement to unemployment benefits has ended.
- Those who completed their unemployment entitlement in January or February 2020 and are not working will be entitled to unemployment between July 1 and August 15. To do so, you need to register online on the Employment Service website.
- The minimum period of unemployment entitlement with only 6 months' work (instead of the normal 12 months) has been extended to August 16. Eligibility in this case is for half the days of unemployment, unlike those who have completed 12 months' work.
- An additional allowance for people over 67 who have been made redundant or placed on unpaid leave will be granted until the 15th of each month.
- The calculation of the daily unemployment value for under-28s with children will be compared with the unemployment rate for those aged 28 and over.
See also: Unemployment in Israel: What are your rights?
What's coming up in the next few weeks?
Legislative procedure to extend unemployment until June 2021 or until the unemployment rate falls below 10%.
Retirement
The automatic extension of the temporary risk (life insurance component and loss of capacity to work in pension funds) will be for 12 months. After that, you will need to contact your pension fund to clarify your rights.
What's coming up in the next few weeks?
When deposits to the pension fund cease, management fees rise to a maximum rate after 6 months without deposits.
The Capital Market Commissioner is working to authorize the increase in management fees only after 12 months without a deposit.
In addition, as part of advanced legislative processes, allowing those whose wages are affected to withdraw up to NIS 10,500 per month from funds placed in the Keren Ichtalmout illiquid (before the end of the 6-year period), for a period of 6 months, without penalty or tax.
State aid in Israel - General
- Possibility of deferring loan repayments until the end of 2020.
- A vast program of subsidies for every citizen is being voted on.
This subsidy will be 750 NIS per person, and 500 Nis for each child in the family.
This latest grant has not yet been passed by the knesset (as of 26.07.2020), we will keep you informed once it is officially passed.
