August compensation deal offers revenue option

Under terms of the package, businesses with annual turnover of up to NIS 1.5m. will be eligible to receive compensation for 65% of the difference between their revenues in August 2006 and August 2005.

By SHARON WROBEL
August 28, 2006 08:17
2 minute read.
biz north 298 88

biz north 298 88. (photo credit: Ariel Jerozolimski)

The Treasury, working together with employers and employees, has agreed on a compensation deal for August that will offer higher war damages for worker absenteeism and compensate businesses for loss of revenue caused by the hostilities in the North. Under terms of the new agreement, businesses will be offered the choice of two compensation packages. The first will be similar to the July agreement, which compensated businesses on the basis of payment of salaries for the absence of workers. Similar to the July pact, the government, employers and employees will share the cost of the compensation package for damages, except that employers will only have to share 15 percent of the cost rather than 27.5% as in July. More importantly, the Treasury agreed to an additional compensation package to cover businesses for lost proceeds during the fighting in August. "The compensation deal for July was a misleading agreement, which did not represent the interests of businesses in trade and services," Uriel Lynn, president of the Federation of Israeli Chambers of Commerce, told The Jerusalem Post. "We urged the Treasury to recognize the need for offering compensation on the basis of turnover loss and we won." Under terms of the new compensation package, businesses with annual turnover of up to NIS 1.5 million will be eligible to receive compensation payment for 65% of the difference between their revenues in August 2006 and August 2005. Lynn said that about 90% of the 90,000 small- and medium-sized businesses in trade and services in the North would fall under the category for compensation entitlement of 65% of lost turnover. "We got about 70% of what we demanded," said Lynn. "Although the agreement has not made compensation on the basis of loss in turnover retroactive for July, the Treasury has increased the percentage of compensation to 65% against the average of 45%, which we expected, which should partly help businesses with their losses in July." Businesses with annual turnover of between NIS 1.5m. and NIS 10m. will be compensated for 55% of the difference in turnover between August this year and the same period last year, while businesses with annual revenues of up to NIS 30m. will be compensated for 50%. Finally, businesses with annual turnover of over NIS 30m. will be compensated at a rate of 45%. In addition, the Treasury agreed to a NIS 900m. loan fund for businesses with annual turnover of up to NIS 30m., the president of the Manufacturers Association of Israel, Shraga Brosh, told the Post. The final agreement for August is expected to be signed over the next few days, while separate deals will be hammered out for the agriculture and tourism sectors.


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