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Sderot Mayor Alon Davidi with soldier in damaged building in 2014..(Photo by: Courtesy)
Finance Ministry approves Operation Protective Edge compensation package
The committee stopped short of declaring the operation a war, which would require paying out compensation for indirect damage to businesses throughout the country.
The Knesset Finance Committee on Sunday night approved an updated plan to compensate businesses for indirect damage incurred during Operation Protective Edge.

Most pressingly for ailing businesses, the regulation will allow them to receive immediate compensation equivalent to 80 percent of their claims based on the previous rules, set from 2012’s Pillar of Defense.

The committee set total compensation for any business at NIS 3 million, but set a clause to increase that limit to NIS 4m. if the operation extends past August 15.

The committee stopped short of declaring the operation a war, which would require paying out compensation for indirect damage to businesses throughout the country.

Instead, those within 40 km. of the Gaza border will be able to claim compensation based on one of three “green” routes.

The first, the wage track, will allow employers to receive compensation for wages paid to employees who didn’t come to work due to the security situation, or to staying at home with children whose summer activities were canceled as a result. Employers are obligated to keep paying wages in such circumstances, and can be compensated at 132.5% of the base wage.

The compensation includes, for the first time, people with disabilities who could go to work, but would not be able to comply with Home Front Command safety guidelines as a result of their disability.

The second track, the business cycle track, would reimburse employers on the basis of lost revenue, compared with revenue the previous year.

The final track, focused on expenditures, would be based on businesses spending on security measures.

Businesses within 7 km. of the Gaza Strip would also be eligible for a more detailed “red track” to assess their damages. Finance Minister Yair Lapid moved to classify Sderot as having the same benefits as border towns in the 7 km. range.

Hotels and venue operators have separate clauses for their needs, allowing them to claim compensation on business lost in September and October as well. Farms and agricultural businesses will have special evaluations on crop or output volume losses, also based on distance from the Strip.

The Finance Ministry had taken measures to fund local authorities, postpone tax payments, and help provide loans to struggling businesses.

Critics blasted the government for failure to declare the conflict a war, which would help those more than 40 km. from Gaza deal with lost business.

“All hotels in Israel suffered in the last weeks from decreased activity, as did restaurants, shops, banquet halls and more,” said Hadas Sharim, head of the small and medium business division at Baker Tilly Israel.

“Doesn’t a photographer who was supposed to work through this period and had all the events canceled not deserve compensation because he doesn’t live in a certain geographic area?” she asked.

She noted that compensation starts with the beginning of Israel’s operation, and did not cover the days of rocket fire that led up to it.

Outside the legal arena, the Manufacturers Association of Israel urged big companies to get payments to suppliers in the South out early to help them out, and requested that banks be flexible with providing credit and postponing payments. Teva Pharmaceutical Industries said it had advanced NIS 23m. worth of payments in cooperation with the association and Histadrut labor federation.

The Manufacturers Association was also on the receiving end of calls for help. The Abraham Fund Initiatives, an NGO focused on Arab-Jewish coexistence in Israel, called on the associaton to speak up for Arab businesses. It cited a Globes poll showing that 67% of Israeli Jews planned to boycott Arab businesses. Yisrael Beytenu leader Avigdor Liberman has called to do so in the wake of Arab-Israeli antiwar demonstrations.
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