Sunday, 25 October 2009

National Insurance - Bituach Leumi Part II

National Insurance Part II

This post has been compiled for us by Tzvi Szajnbrum a lawyer who has some free services for Olim

Work Status

Sometimes a person changes his work status (for example, he may cease working as an employee and begin working as self-employed). Such a change has implications on the benefits he receives from the NII as well as on the rate of insurance contributions that he is obliged to pay to the NII. Types of changes in work status and benefits affected by the change vary from case to case.


Rates of insurance contributions for a person who has income and is neither an employee nor self-employed :

For the share of the income that is up to (60% of the average wage): % 4.61 (as of 07.01.2002) national insurance and % 5.00 (as of 01.01.2006) health insurance contributions, and for the share of the income that is above 60% of the average wage and up to the maximum income liable for insurance contribution: % 7.00 (as of 01.01.2008) national insurance and % 5.00 (as of 01.01.2006) health insurance contributions.

A student who does not work:

A student at an institute of higher learning who does not work pays the minimal rate of national and health insurance contribution - NIS 110 (as of 01.01.2009) , using the payment booklets sent to him/her once a year.

Domestic Worker and His / Her Rights:
· A domestic worker is a person employed in household work not for his employer’s business or occupation. Such work includes the care of children, cleaning stairways in apartment buildings and the like.

· A person employing a domestic worker must register him at the National Insurance Institute, must report on his wages, and must pay both national insurance and health insurance contributions for him.

· The employer may deduct the worker’s share of the insurance payment from the worker’s wages.

· When filling in a report of the employment of a domestic worker, all of the worker’s particulars must be accurately registered. Non-specification of the worker’s particulars in the report or specification of incorrect particulars may adversely affect the worker’s rights in national insurance.

· The penalty imposed on a person delaying payment of insurance contributions for a domestic worker is one year of imprisonment or payment of a fine. This person will also be required to pay insurance contributions based on the employee’s actual wage, but no less than half of the average wage during each month of the employment for which payment was delayed. Furthermore, the Institute is entitled to file a claim against a person who did not register a domestic worker on time, or did not pay insurance contributions on time, for the sum of the benefits to which the worker is entitled.

· The obligation to pay insurance contributions for a domestic worker applies also to a person who employs a foreign resident or a worker who is not an Israeli resident and resides in Judea, Samaria, and the Gaza Strip or in the territories of the Palestinian Authority. Insurance contributions for these workers are paid directly to the National Insurance Institute.

Ceasing work:

A person who ceases working and cannot return to the labor market may be eligible for NII benefits for limited periods as a substitute for his wages.

· There may be a number of reasons for ceasing work. The benefits related to these various reasons are listed below.

· A student at an institute of higher learning who does not work pays the minimal rate of national and health insurance contribution - NIS 110 (as of 01.01.2009) , using the payment booklets sent to him/her once a year.

Immigrating to Israel

· The NII provides a wide range of benefits to persons immigrating to Israel for the first time as well as to returning residents, in accordance with the different needs of these population groups.

· Some of the rights provided are contingent on payment of insurance contributions.


· The NII assists persons injured in various circumstances – and therefore unable to function at work or in daily life – in a number of ways.

Causes of the injury and the relevant benefits:

Hostile (terror) action, Vocational Rehabilitation (work or accident), Work Injury, or Attendance Allowance (work or accident).

Living Abroad

· For a NII beneficiary, living abroad may have implications on his right to receive NII benefits, and even lead to the ceasing of payments for the entire period of his stay abroad. The continuation or cessation of eligibility for benefits depends on the circumstances of the departure from Israel, as stipulated in the law.

· Circumstances of departure, and relevant benefits, vary from case to case.

Pregnancy, Birth and Adoption

The NII provides a wide range of benefits to women giving birth and their husbands, both during and after the pregnancy. Benefits are provided also to couples who adopt a child.

The circumstances entitling the couple to benefits and the list of relevant benefits vary from case to case such as: Maternity Allowance, Hospitalization and a Maternity Grant, A high- risk pregnancy, or Adopting a child.

Reaching Retirement Age/ Age of Entitlement to Old-Age Pension

· The NII will grant an old-age pension to persons reaching retirement age, on condition that they do not have high incomes. Persons who require assistance in daily activities may be eligible for such assistance from the NII.

· When you reach this age, you may be eligible for one or more of the following benefits: The age at which the insured person is eligible for old-age pension, conditional on means test. The age gradually rises until, at the end of the process, it will reach 67 for men and 64 for women.

If you need more information or clarification on any subject concerning the NII, please feel completely comfortable to contact Tzvi by email or phone, his contact details be found on his site: or

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