Coronavirus unemployment pay - advice

It remains to be seen whether the Israeli government provides any support for businesses and the self-employed.

A young woman wears a costume as a reference to coronavirus during the Jewish holiday of Purim in Ashkelon March 8, 2020  (photo credit: AMIR COHEN/REUTERS)
A young woman wears a costume as a reference to coronavirus during the Jewish holiday of Purim in Ashkelon March 8, 2020
(photo credit: AMIR COHEN/REUTERS)
Due to the coronavirus outbreak, the government has just announced expedited measures for people laid off by their employer without pay to register for unemployment benefits.
It is not for everyone. The unemployment pay is currently only for people on unpaid leave for 30 days or more who meet certain conditions. But registration is possible online and it starts the 30-day clock ticking now, in case your employer doesn’t take you back after 30 days. And if the leave is due to coronavirus, you don’t have to use up vacation days first to apply.
You must obtain Form Bet Lamed/1514 from your employer indicating the unpaid leave start date, expected period of leave and your earnings.
Once you register, in person or online, you have 14 days to show up physically at the Employment Service. If you are under home quarantine, you must still follow certain rules of the Employment Service, including a rule to show up at an Employment Bureau once a month between the 15th and, rather than daily (It is not yet clear what happens if you can’t).
And if you don’t return to your work place after all, you must show up according to a schedule that will be determined for you.

How much is unemployment pay?
Unemployment pay is calculated on a daily basis as a proportion of your pay in the last six complete months before you apply. For example, someone aged at least 28 who was earning NIS 7,000 per month may receive unemployment pay of NIS 4,800 for a complete month of 25 working days. Someone who was earning NIS 15,000 per month may receive unemployment pay of NIS 7,470 per complete month. The maximum unemployment pay is NIS 10,551 for someone who earned NIS 25,275 per month.
Lower rates apply to someone aged under 28, e.g. NIS 3,660 per month unemployment pay if earnings were NIS 7,000 per month. After 125 days, the unemployment pay reduces to a maximum of NIS 281.36 per day. These payments are taxed.

Comments:
It is still early in the crisis, so it remains to be seen how all this works out. But National Insurance Institute officials were interviewed in the Hebrew media and sounded keen to help affected people. The 30-day waiting period implies that the unemployment is targeted at those who find they don’t have a job to go back to after starting the unpaid leave. In other words, the economy might yet get worse before it gets better.
Employees who are dismissed by their employers for any reason may generally be entitled to severance pay at the rate of one month per year of service, after the first 11 months. That equates to 1/12 of your latest pay or 8.33%. In many cases, 6% of this will already have been paid into your pension fund (kupat gemel) by your employer. All this would need checking out with your insurance agent and/or labor lawyer. Employers should perform similar checks.
It remains to be seen whether the Israeli government will provide any support for businesses and the self-employed.
The above is general and preliminary. Consult the National Insurance Institute and Employment Service for specific cases.

The writer is a certified public accountant at Harris Horoviz Consulting & Tax Ltd.