Plan to offer unemployment benefits for self-employed workers approved

While salaried workers are entitled to unemployment benefits when they lose their livelihoods, self-employed workers are not currently eligible for such benefits.

 Israeli self-employed protest the lack of financial support from the Israeli government in times of Corona, when many find themselves unemployed, on Rothschild Boulevard in Tel Aviv, July 7, 2020.  (photo credit: MIRIAM ALSTER/FLASH90)
Israeli self-employed protest the lack of financial support from the Israeli government in times of Corona, when many find themselves unemployed, on Rothschild Boulevard in Tel Aviv, July 7, 2020.
(photo credit: MIRIAM ALSTER/FLASH90)

A long-awaited plan to allow self-employed workers to collect unemployment benefits was approved by the Ministerial Committee for Legislative Affairs on Sunday.

While salaried workers are entitled to unemployment benefits when they lose their livelihoods, self-employed workers are not currently eligible for such benefits. This discrepancy became a significant issue when the coronavirus pandemic forced many to shutter their businesses.

The outline was promoted by Yamina MK Abir Kara, who joined politics after he helped found the “I am Shulman” movement, which lobbies for benefits for self-employed workers.

The bill will go to a vote in the Knesset plenum on Wednesday and is expected to pass a preliminary reading, as it has the coalition’s support.

The model allows independent workers to choose between two routes.

Yamina candidate Abir Kara attends preparations for the new Knesset on April 5.  (credit: MARC ISRAEL SELLEM)Yamina candidate Abir Kara attends preparations for the new Knesset on April 5. (credit: MARC ISRAEL SELLEM)

Under the “self-employed as an employee” track, an independent worker can issue a payslip for himself and thereby become eligible for social benefits.

Under the “Safety Network” track, a self-employed worker can set aside a reduced amount for National Insurance (Bituach Leumi), with one percentage point going toward a savings fund that can be used in cases such as illness, unemployment or vacation time. Money that is not withdrawn will go toward a pension.

“My main election promise was creating a safety net for the self-employed,” Kara said. “This bill will allow the self-employed to operate with greater security, without being enslaved to the workings of Bituah Leumi. It gives free choice to business owners and entrepreneurs to choose between two tracks. We fought for this with the Shulman group before corona, and now we are taking another step toward implementing a plan that will solve the issue forever.”

“This welcome legislation to equalize the rights of the self-employed and employees, drafted by the Chamber of Tax Advisers, is a necessary order that will end the ongoing discrimination and give control back to the self-employed, who are the engines leading the economy,” added tax adviser Yaron Gindi, president of the Chamber of Tax Advisers. “This is a critical step for the Israeli economy, and will encourage our younger generation to turn to entrepreneurship and innovation.”

Separately, the Finance and Economy ministries approved a NIS 60 million grant to cover rental expenses for businesses that suffered from coronavirus closures in 2020.

Businesses whose expenses in 2020 were at least 90% of those in 2019 and whose rental expenses exceed 17% of revenues will be entitled to a grant of NIS 100 per meter (as stated in the property tax bill and subject to a rental agreement), and up to NIS 120,000 per business.

Application for these grants will be available in December on the website of the Small and Medium Enterprises Authority, with a link to be made available at that time.