For obvious reasons, the Israeli Income Tax Ordinance offers tax concessions to disabled people. Section 9(5) grants an exemption from tax on income of someone who is blind or disabled, within certain limits. For income from employment or self-employment, the exemption is limited to income of NIS 507,600 per year if the individual is disabled 365 days or more; or NIS 60,960 per year for someone disabled 185-364 days. In the case of other income, notably investment income, the exemption is currently limited to income of NIS 60,960 per year, if the person is disabled 185 days or more. But if the income is interest on a deposit derived from compensation for bodily harm, the limit is currently NIS 217,080 per year. Note that these exemption limits are further reduced, pro rata, according to the days in the year the person was not considered disabled. The amounts are also updated annually for inflation. The exemption is granted only to persons who are considered 100 percent disabled, or at least 90% disabled according to a special calculation. The disability is determined by a medical committee of the National Insurance Institute in Israel or as determined under other special laws. A number of serious conditions are recognized as causing disability, namely: cancer, dialysis, various transplants and severe heart disturbance. In such cases, persons concerned would be advised to take up the matter with the National Insurance Institute - in relevant cases it may be possible to obtain disability confirmation with retroactive effect of up to six tax years. Recently, there was an interesting case in the Tel Aviv District Court. An individual had to stop work in 2005 due to a serious heart condition and received a lump sum of NIS 3.6 million as severance pay from his employer. The individual was exempt for part of this amount under the rules relating to severance pay - one month's final salary is exempt per year of employment, up to a monetary limit. The individual then applied to the Israeli Tax Authority to spread the remaining lump sum over the six tax years, commencing with the year he stopped work, and the Tax Authority agreed to this. This meant that he was taxed on one sixth of that amount every year for six years. Then, for good measure, the individual also claimed the disability exemption (now NIS 507,600) in each of those six years - in other words he claimed an exemption of over NIS 3 million. The Tax Authority did not accept this but the court did, and ordered the Tax Authority to refund tax paid on account with interest and indexation (Sarel Shabaton vs. Assessing Officer Tel Aviv-Jaffa 5). The above relates to income tax. In addition, a disabled person who purchases a home in Israel may be granted a reduced rate of acquisition tax (Mas rechisha) of 0.5% if certain rules are met. However, a disabled purchaser who is a non-Israeli resident will need to obtain confirmation of his or her disability in Israel as mentioned above. So if you are disabled or know someone who is, it may be worthwhile checking out the potential eligibility for Israeli tax benefits with a professional tax adviser. firstname.lastname@example.org The writer is an International Tax Partner at Ernst & Young Israel.