Giving up your social residence in Israel with the bituah leumi.
Under Israeli law, all residents are covered by a social security scheme that provides them with health insurance. At the same time, they must pay monthly contributions to the National Insurance Institute, the Bitouah Léumi.
A social resident is defined as anyone whose center of life is in Israel.
If you have lefté Israel to return to live abroad, you must choose one of the following two options:
- Informing the Bituah Léormi if you have chosen to maintain your center of life in Israel.
In this case, your health insurance will be maintained and you will be entitled to health services similar to those received by residents of Israel.
Choosing this option will require you to make a in relation to Bituah Léumi on all income generated abroad.
This includes active income (salaries, business income) as well as passive income (property income, capital gains, etc.).
You will have to pay 12% on this income. 5% in health tax and 7 % in social security contributions.
Note that there may be a social security agreement between Israel and the country to which you have moved. In this case, you will only be taxed on the health tax at the rate of 5%.
Please note: It is likely that after 5 years abroad, the Bituah Leumi will stop seeing you as a resident of Israel and refuse your eligibility for health services.
- Inform the Bitouah léoumi if your center of life is abroad.
The Bitouah Leumi considers that a national who has his center of life abroad must give up his social residence in Israel.
In this case, you are exempt from declaring and paying insurance fees in Israel for income generated abroad.
At the same time, you will no longer be entitled to medical services in Israel, unless you are insured with a private health insurer.
Read also: What exactly is Bitouah Leoumi?
Four important points to summarize the abandonment of social residences in Israel:
A - Payment of the minimum social contribution.
All Israeli citizens living abroad and has no income must settle a minimum social contribution of 177 NIS per month (amount updated annually).
Therefore, if you live abroad and have not reported your departure to Bituah Leumi, you will have to pay a contribution of between 5% and 12% on the amount of your income.
Please note: You may have to pay Bituah Leumi contributions retroactively if you have remained insured but have not paid the legally required amount.
How can the Bituah Leumi know that you have income abroad?
The Ministry of the Interior is connected to the Bituah Leumi and the tax authorities, and informs them of all entries and exits from Israeli territory.
When you return to Israel or stay here for a long period, the Bituah Leumi may contact you and ask you to declare income from abroad.
Therefore, if you work abroad, you are advised to take the necessary steps with the Bituah Leumi to give up your social residence in Israel in order to avoid paying contributions at the rate of 12%.
B- Payment of insurance premiums and maintenance of social residence in Israel.
If you continue to pay your contributions and maintain your residency with the Bituah Leumi, you are considered to be affiliated to Israel. You will therefore be entitled to social insurance coverage and medical care in Israel.
Caution: Maintaining your social residence in Israel is a sign that your center of life is in Israel. This may have an impact on your tax residence in Israel.
Read also: Who is considered an Israeli tax resident?
C - Giving up your social residence in Israel - Apply through a professional.
In order to leave your social residence in Israel, the Bitouah Léoumi asks you to fill in a form with information about your new social residence.
It is strongly recommended that this type of file be completed by a professional. Every piece of information transmitted can have important consequences, both financially and in terms of social and medical coverage.
D - Renewal of eligibility for medical services after return to Israel.
In order to benefit from the social security cover provided by the Bitouah Leumi after your return to Israel, you must respect a waiting period. If you had interrupted your residency with the Bituah Leumi, you must count a consecutive period of 25 days for each year of absence.
For example, if you've been off work for three years, you'll have to wait 75 days to qualify for social benefits again.
In all cases, the waiting period will not exceed 6 months. So if you've been away for 8 years, you'll only have to wait 6 months.
Important information: if you don't want to wait for the deadline, you can pay a lump-sum contribution to avoid waiting for the eligibility period.
How can I benefit from social security cover while abroad?
You have 2 options to be covered during this waiting period :
- Be insured by a private insurer.
- Make a single payment to Bituah Leumi to cancel the waiting period.
Your questions - Our advice : Social residence in Israel.
- I'm going back to France for a few years, is the French social security cover sufficient or do I still have to pay the social security? Bitouah Léoumi during this period?
- Is giving up social residence in Israel automatic? Do I have to fill out a form or take any other steps?
- Does giving up social residency in Israel necessarily mean giving up tax residency?
- I'm going abroad for a few years. How can I be sure I'm making the right choice when it comes to social security coverage?
- How do I notify the Bituah Leumi that I am leaving my social residence in Israel?
Disconnecting your social residence in Israel can have far-reaching consequences.
We strongly recommend that you enlist our help to make the right choices.