Wednesday, 28 December 2011

Bituach Leumi Difficulties - Be Careful!

If you're new to Israel, one regular tax you need to be aware of is "National Insurance" otherwise known in Hebrew as "Bituach Leumi." Though this post is not concerned with the amounts you'll be paying, nor individual details, it is known that the minimum current amount paid by anyone (18 years and over) breathing in the holy air of Israel is ₪154 per month - whether employed or not. If you do earn any income while living in Israel, there is a complete listing of amounts earned together with amounts due to Bituach Leumi for tax purposes. Money received by the national insurance is supposed to take care of general "free" medical attention and other emergencies such as when one is unemployed (though a closer look at things may not make sense i.e. read the second sentence of this post again!)

One can pay one's dues at a post office, in person at Bituach Leumi's offices or even using the Internet with one's credit card. At various points in the year (or perhaps once only at the beginning of the year) one is issued a booklet with amounts due and by which dates those amounts are due - so making payments can be "easy."

Be warned however, you must pay attention to amounts you are being charged on a regular basis. In the event that you miss a payment, you will be fined a penalty - immediately to the amount of one shekel (usually!) There is no going back or making excuses for a one day late payment. If, on the other hand you have not informed Bituach Leumi of an increase in a month's earnings, you may find yourself owing Bituach Leumi not only an additional amount, but a heavy penalty tax of hundreds and even thousands of shekels immediately! It is not an easy thing to get off this and has been known to result in severe depression, panic and other difficulties to those hit suddenly with these amounts unknowingly!

Though all this applies and is completely "legal," keep a watch on what Bituach Leumi might be doing behind your back! A recent Oleh notified us of their honesty in making regular payments. They were required to pay some 250 shekel per month - which they do regularly via the Internet. A couple of months ago, Bituach Leumi returned their payment indicating that it was not needed. The next month, a payment was made again - and this too was returned to their account, indicating that payment was also not necessary. But suddenly Bituach Leumi "remembered" that payment was necessary after all, now charging them for the next month with a penalty of 2 shekels for not having paid their Bituach Leumi (perhaps for the previous two months?!) See graphics below:

The first graphic (see right hand side) clearly indicates 499 shekels return (254+245) - the last amount of 254 shekel was returned on the 4th December. Yet notice in the second graphic, the headings:

קרן - Monthly Amount - 245
קנסות - Penalties - 2
סה"כ חוב - Total Debt - 247

Notice the date when payment was due by (third graphic) - 15 December. Payment was clearly made just 11 days earlier... but after refunding the victim, Bituach Leumi debited him with the amount and another 2 shekels penalty (maybe because he paid early?!)

Indeed Bituach Leumi were one up on the innocent victim by returning the money that had been paid to them by the victim - back into the victims bank account - and then charging a penalty fee for "payment that was not made"!)

So what does this do to the victim practically?

It causes a loss of "penalty" money that should never have been taken. In effect Bituach Leumi have taken something that was never theirs in a perfectly "legal manner!"

There is another loss to the victim - and here's when the 2 shekel amount turns into a much larger loss! In his accounting records, the victim will have to now declare another 499 shekels as income - call it "compensation from Bituach Leumi" and be taxed on that!  The accountant will view this as income from Bituach Leumi or perhaps even "compensation" from them. In addition to this, should the victim be in need of Arnona (land tax) assistance or anything else - where a copy of the bank statement must be produced, the authorities will see that Bituach Leumi are already helping the victim, causing the possibility that the additional help needed will never come about! 

NOTE: As far as the Iria (Municipality) is concerned, an income of just 2000 shekel is considered enough to pay for a full month's expenses, and therefore not deserving of the discount for Arnona.

Be warned! Bituach Leumi, Arnona, banking fees and other taxes may tax and deduct whenever it pleases them. Should you find yourself in such a situation it is best to consult with a professional immediately.

Remember, your 2 shekels may not seem like much (as a start) but if we do not fight these things together, then effectively Bituach Leumi can be quite "legally" gaining some 14 million odd shekels for forbidden activities each month - by simply taking just 2 shekels from each citizen of Israel - all in the name of an honest penalty!

Have you been cheated in Israel by anyone? Tell us your story. We want others to know and to be warned.

* This post is not written by an accountant or legal representative but is based upon real tangible evidence in a victim's personal situation.


  1. You are being too kind. Bitu'ach Le'umi is much, much more complex than this - and much more crooked, too.

    One must pay Bitu'ach Le'umi for every month that you exist. Period. They keep their records by the month. Once you have paid ANYTHING for the month, you are off the hook for that month (if you have paid the right amount).

    However, when they send you demand notices for more money, they simply say "you owe 5,692 shekels" and do not itemize which months have been paid up and which are still missing. They don't seem to actually KNOW what you've paid nor for which months.

    Thus people get bills regularly (I get them every month and ignore them) and every once in a while may get another notice that they have "found" some payments made 1-2 years ago, reducing the amount you owe. When I asked them about this, they said that they don't update their records for 18 months or more after payments are made - but they send bills immediately! Lesson: Keep all receipts - forever! They can forget that you made a payment and demand it all over again! Even 30 years later!

    Another problem is that Bituach Leumi TAKES MONEY FROM YOUR BANK ACCOUNT when they feel like it, if you don't pay up. I've had thousands stolen from me by Bituach Leumi.

    So they don't actually know what you've paid, they don't recognize payments when you do make them, they send out bills for payments which have already been paid and they freeze your bank account and pay themselves whenever they feel like it.

    I think that the Comptroller has more complaints about Bituach Leumi than any other government office. I wonder why?

    Welcome to the Socialist Workers Paradise!

  2. Excellent Post. Bituach Leumi has to be the most difficult agency to deal with. When making a claim always give them only copies as they have a habit of losing papers and saying they never received them. When I have a claim, I make 2 copies. One to submit and the other, I have them date stamp every page. Experience taught me two can play the game.

  3. I have returned after being out of the land for 6 years. I'm now considered a returning citizen. I left Dec 2004 and didn't receive any booklets for 2004. I'm also now pension age. have not worked much in Israel. Maybe just 3 yrs total. Went down to Bituach Leumi to update and recently received a bill for 3055 shekels. 1200 of that is the penalty. My accountant told me to absolutely not pay the penalty part. He wants to contest it. Can I do that? I will be going down tommorrow to pay it. I don't want to pay the penalty part. What do you think?

  4. Bituach Leumi of Israel costs honest folks much more than a shekel or two, and I think the above is a distraction from the real injustice that is the national insurance tax system. Living in the "holy" land makes the practice that much more disgusting.

    Even those who are unemployed must pay, as if not having money for food or rent is such a small sacrifice for "free" healthcare (assuming one qualifies if behind on payments.) Then there are the locked bank accounts and confiscation of property in one's own home to pay for the fees unpaid.

    Getting help is near impossible since gemachs, nonprofits, as well as BL staff all cross arms over chest, point to the left and the right, telling folks to go to the other guy if hungry or can't pay landlord, but just make sure to pay that national insurance... or else.

    Bituach Leumi of Israel extorts citizens, including the poor, through fines, theft, and thuggery. That's what folks ought to get angry over and rise up against! These acts are also legal and a heck of a lot worse than losing one or two shekels.



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