Cabinet approves war compensation package for affected businesses and self-employed
Finance Ministry’s plan, which awaits Knesset approval, includes grants to businesses that have suffered indirect damages due to the war and benefits for employees on unpaid leave
Sharon Wrobel is a tech reporter for The Times of Israel.
The cabinet on Thursday approved an outline of a war compensation package to help businesses continue operating as Israel continues its war with the Hamas terror group.
The compensation aid package presented by the Finance Ministry for approval overnight includes grants to businesses across the country that have suffered indirect damages due to the ongoing war, and benefits for employees put on unpaid leave.
It still needs to be passed by the Knesset, where it is expected to be submitted for approval in the coming days.
More than 300,000 reservists have been called up and some 200,000 people have been internally displaced from their homes near the borders with Gaza in the south and Lebanon in the north. Israel has vowed to eradicate Hamas in the aftermath of the atrocities perpetrated by the terror group that has ruled the Gaza Strip since 2007.
On October 7, some 3,000 terrorists burst into Israel in a shock onslaught and killed over 1,400 people, a majority of them civilians, including babies, children and the elderly.
Hamas and allied terrorist factions also dragged at least 243 hostages — including some 30 children — to Gaza.
Businesses across the country with a turnover of NIS 18,000 ($4,514) to NIS 400 million that have seen a decline in income of over 25% in October or 12.5% over a two-month period will be eligible for the fixed grant.
Businesses will be entitled to compensation of up to 22% of their fixed expenses and a reimbursement of up to 75% of their salary expenses. The maximum grant for businesses with a sales turnover of NIS 300,000 to NIS 100 million is capped at NIS 600,000, while for those with a turnover of NIS 100 million to NIS 300 million the ceiling will gradually go up to NIS 1.2 million.
Compensation for businesses with a transaction turnover of NIS 300 million to 400 million will be subject to a ceiling of NIS 1.2 million.
Businesses and self-employed individuals that are exempt from value-added-tax will be granted a fixed amount. For example, self-employed individuals with an annual turnover of up to NIS 49,800 will receive NIS 1,750 and those with a turnover of up to NIS 120,000 will get NIS 3,300.
The Tax Authority will allow the submission of online claims for the grant for a 90-day period once the application process starts.
Benefits and allowances for employees on unpaid leave includes eased terms that offset vacation days and the receipt of unemployment pay.
A group of employers’ and manufacturers’ associations criticized the plan for not going far enough as it provides only partial compensation for affected businesses and employees. The group said that as a result, “hundreds of thousands of workers who will remain without salaries.”
“The outline is morally and economically flawed in that it will not prevent workers from being put on unpaid leave and may even encourage furloughs,” the group said in statement.
The group urged the government to amend the compensation outline before it passes into legislation.
“The revised outline should include comprehensive salary compensation, as has been the case so far in every round of combat, and include a flexible unpaid leave model, to preserve employment flexibility while maintaining the relationship between employers and employees,” the statement read.
