Minimum wage to rise 3.6%; NII payments unfrozen

The minimum wage will rise 3.6% to NIS 3,456.58 per month from NIS 3,335 starting April 1, the Justice Department confirmed Thursday. The move results from Attorney General Menahem Mazuz's decision to end the freeze on the minimum wage, which had been in effect for five years. Supplements granted to Holocaust survivors, veterans who fought against Nazi Germany, IDF veterans disabled in service, families of IDF fallen soldiers, and new olim (sal ha-klita) will be adjusted as well. Child allowances for first and second children will be raised 20% to NIS 148 monthly, ending cuts to the payment. In accordance with budgetary legislation, the National Insurance Institute's official average wage index had been effectively frozen since 2001, preventing full adjustments to welfare payments, minimum wage, the wages of senior state employees, and other payments tied to the average wage, linking them to the consumer price index instead. Additionally, child allowances paid for the first and second child were reduced. Due to the dissolution of the Knesset on December 29, the Finance Ministry and Knesset Finance Committee legal advisor Smadar Elhanani had claimed that, legally, the freeze must be extended until after elections, postponing adjustment of the payments and minimum wage level for another year. The NII argued that the freeze had ended on December 31, and that the adjustment should not be delayed. Mazuz "who was required to settle the question that had arisen, accepted the National Insurance Institute's position, and determined that the freeze on minimum wage be ended," bringing the payments up-to-date, the Justice Ministry said. Responding to headlines in the Hebrew press, the Finance Ministry stressed that there was never any conflict between it and the NII. "Mazuz has made his decision, to which we are bound, and we will implement it," a Finance spokesperson said. NII told the Justice Ministry that, following the decision, its supplements would be increased starting January 2006 by 2.7%, besides old age allowances and supplements paid to dependents of injured workers and heirs of deceased insurees, which would be raised 1.8%, since they weren't frozen in 2005.