After harsh public criticism, the Ministry of Finance will issue an improved compensation outline for the economy this evening. This was after agreements were reached with representatives of the business organizations and the self-employed, including representatives of the Finance Committee, who are supposed to discuss the new outline tomorrow at 10:30 a.m.
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According to the emerging outline, the threshold conditions for entry into eligibility for the grant are a decrease in turnover of 25% compared to the same period last year for businesses with sales turnover of up to NIS 400 million per year. This is similar to the previous outline.
For businesses with an annual turnover of up to NIS 100 million, the total compensation ceiling (for wages and fixed expenses) will be NIS 600,300, compared with NIS 1,2 in the previous outline, and up to NIS 300.75 million to NIS 60 million. In addition, the state participation grant in employee wage expenses will be increased, and will be calculated according to <>% of the cost of wages multiplied by the rate of decline in turnover, compared with <>% in the previous outline.
Following the presentation of the initial draft of the compensation outline, the Finance Minister's team worked together with representatives of the coalition and the opposition to significantly increase the compensation outline and reach agreements with the main players in the business sector. According to the outline, in addition to the compensation currently prescribed by law in relation to frontier communities (including Ashkelon), an outline of grants will be given to businesses under the following conditions:
A threshold condition for entry into the grants program is a 25% reduction compared to one defined base period, and an annual turnover of up to NIS 400 million.
- The fixed expenses component of the inputs will be a maximum of 22% (depending on the degree of damage). The higher the actual rate of inputs, the more attainable it may be (limited to up to 1.5 times).
The compensation ceiling will be NIS 600,100 in turnovers of up to NIS 1 million and will gradually increase to NIS 2.300 million for businesses up to NIS <> million.
- The rate of participation in workers' wages will increase to 75% multiplied by the rate of damage in turnover multiplied by wage expenses.
Easing of unpaid leave until November 30
The unpaid leave outline will be based on the existing model, subject to the following leniencies:
Removal of conditions for deducting accrued vacation days from unemployment benefits – Elimination of waiting days (without offsetting five days of unemployment benefits)
– Reduction of the minimum period of unpaid leave from 30 to 14 days
– The minimum eligibility period will be reduced to 6 months out of 18 months
– The easing will take place between 7/10 and 30.11, when the date of departure for unpaid leave determined by the Employment Service will be from the employee's actual departure on unpaid
leave.
The proposed outline will apply until November 30, 11, and the Minister of Finance, with the consent of the Finance Committee, may extend it until the end of 2023. The outline was signed with the support of the presidency of the business sector and all its departments and the General Workers' Union. According to its terms, the outline is agreed as a whole and if there is a change in one of the sections, the other sections are irrelevant.
Localities within 7-20 km (and Ofakim), which are not in the agricultural sector, will receive a wage or turnover track similar to previous rounds.
Outline for farmers
- Frontier settlements: according to the law
Up to 20 km (including Ofakim), which are not frontier settlements - a red track alongside a normative green track, subject to legal approval.
- Rest of the country: like the general grant.
Later today, the memorandum of law will be circulated in order to advance the law as quickly as possible and to support the self-employed and employers from the first month of the fighting.
In addition to the compensation outline, it was decided to grant spouses of reservists, as well as increasing the payment for a reserve day to 125% and bringing forward the payment already to the end of October in order to facilitate the continuous economic management of citizens.
Finance Minister Bezalel Smotrich:
Substantive joint work between the coalition and the opposition has brought an excellent result to the citizens of Israel, last week I pledged that we would stand with the citizens and my goal is to fortify the State of Israel's second line of defense, the back line, with an open treasury wallet in order to provide support to the economy, the self-employed, businesses and all citizens. The initial outline was presented quickly, but gaps immediately surfaced that required correction. My team, in collaboration with representatives of the coalition and opposition and representatives of the organizations, went to work and reached a better and more expansive outline for businesses in Israel.
This is a huge outline that will give businesses and citizens a breath of fresh air. I thank the members of Knesset, members of the coalition and opposition, and especially Chairman Gafni and the opposition center Vladimir Belyak, who understood the magnitude of the hour, who acted thoroughly and professionally without noise and bells and whistles on behalf of the citizens of Israel.
Finance Committee Chairman MK Moshe Gafni:
Our job is to do everything possible to help the residents, especially in the frontier communities.
We have made every effort to have many localities enter into the maximum possible assistance and to assist workers and employers.
We pray to the Almighty that the war will end quickly and well.
I congratulate the Minister of Finance and thank the members of the Finance Committee from the coalition and the opposition who showed responsibility in order to finalize the outline and help the citizens.
MK Eliyahu Revivo, the coalition coordinator on the Finance Committee: From the very first moment I said from every platform that I would not allow progress with two outlines of two government ministries, and that it is our duty to expand the full compensation beyond 7 kilometers.After intensive work together with the chairman of the Finance Committee vis-à-vis the Finance Ministry and representatives of the business sector, I am very pleased that the state is presenting a united,
balanced and correct outline.
I am proud that my demand to increase the range of full compensation to 20 km, including the city of Ofakim, was accepted.
The Israeli economy will receive the certainty it deserves and the casualties will be compensated.
Knesset Finance Committee Opposition Center MK Vladimir Belyak:
I welcome the new outline, which provides a better and more correct response to both business owners and salaried employees. Through a thorough and professional process, we succeeded in significantly increasing assistance to citizens who shoulder the economy.
I would like to thank Finance Minister Bezalel Smotrich, Finance Committee Chairman MK Gafni, MK Yinon Azoulay and all the heads of the organizations for their cooperation.
To the extent that additional assistance is required in the coming months, we will take the necessary steps for the benefit of the Israeli economy. Together we will win.
Chairman of the Business Sector Presidency Dubi Amitai: Since the Finance Outline was published,
we have gathered for days of intensive work and significantly improved the compensation and grants outline for the business sector. As the fighting continues, additional adjustments must be made in order to move the wheels of the economy and help the business sector continue its activity. I would like to thank Finance Minister Bezalel Smotrich and Finance Committee Chairman MK Moshe Gafni for working together on behalf of the business sector. In addition, I would like to note the quick and efficient response given to farmers in the frontier areas.
Histadrut Chairman Arnon Bar-David:
With joint forces and a dialogue that rose to the size of the hour, we reset the issue of unpaid leave and formulated an outline that provides an important first response. The safety net provided by the outline, in the form of wage compensation for employers and a protective envelope for employees, creates the certainty required for the state to ensure the resilience of the economy even in times of war.
President of the Association of Tax Advisers Yaron Gindi:
The updated outline that we formulated with the Minister of Finance does indeed enable businesses to get through the difficult period as living businesses and growth engines that will return the economy to activity at the end of the war. The Minister of Finance was very attentive to our demands, and I was very pleased to see that he did not become fixated on the initial model proposed by the Ministry of Finance. We sat together for hours, professionally analyzed the data and arrived at a proper and responsible model.
President of Lehav Adv. Roy Cohen: I congratulate the Minister of Finance on the necessary change in the compensation outline after talks held with us last week and his willingness to strive for a fair and proper solution, and this shows how important the dialogue, connection and cooperation with the Minister of Finance and the professional staff in the Ministry is, I have argued all along that disputes are resolved through fair and respectful dialogue with the heads of economic organizations, and to my delight this was the case, and the outline was adapted as much as possible to the needs and responses of the self-employed and business owners, and together we will overcome additional challenges in the future.
Director General of the Ministry of Finance Shlomi Heisler:
I welcome the broad conclusion that we have been able to reach. The outline provides a response to a wide range of businesses, enables the economy to continue operating, and includes a flexible response to the working public through amendments to the unpaid leave mechanism. The sophisticated summary we reached together reflects broad agreement and expresses the united Israeli spirit. Together we will win, so will the economy.
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