COVID unemployment benefits said to cost the state NIS 39 billion ($12 billion)

More than 200,000 people expected to stop receiving benefits after sweeping changes to the program voted into law

A man queues at the entrance of the National Insurance Institute branch in downtown Jerusalem on September 21, 2020. (Nati Shohat/Flash90)
A man queues at the entrance of the National Insurance Institute branch in downtown Jerusalem on September 21, 2020. (Nati Shohat/Flash90)

Israel has paid out more than NIS 39 billion ($12 billion) in unemployment benefits since the start of the COVID outbreak, according to figures from the National Insurance Institute.

The benefits were paid out to 1.2 million Israelis who lost their income due to the pandemic, Channel 12 reported Thursday night, based on those figures. From March through the end of 2020, the unemployment benefits cost the state NIS 23.5 billion, and NIS 15.5 billion has been paid out so far in 2021.

The unemployment model enacted in March 2020 came to an end on Thursday after the Knesset voted to update the program and significantly cut back on benefits. Under the new law, the majority of Israelis under age 45 will cease to receive benefits. Those over 45 will see their current level of payment reduced, and their benefits continue through to the end of October.

More than 200,000 people stopped receiving benefits as of July 1 under the new plan, according to Channel 12, and about 182,000 will continue to receive them for a period of time.

According to the National Insurance Institute, anyone who becomes unemployed after July 1 will be assessed according to the standard unemployment laws that existed pre-COVID. But the period of time an employee must have worked before being able to claim unemployment was lowered from 12 months to six months.

Finance Minister Avigdor Liberman had pushed for sweeping changes to the existing unemployment model in order to push people — particularly the young — to return to work.

Finance Minister Avigdor Liberman (center) attends the Eli Horowitz Conference for Economy and Society, organized by the Israel Democracy Institute, in Jerusalem on June 29, 2021. (Yonatan Sindel/Flash90)

According to Liberman, the move will help fill some 130,000 job vacancies, as the economy has roared back to life with the near eradication of the coronavirus.

The Central Bureau of Statistics announced last month that there were 133,000 positions available in May, the highest number since statistics began to be kept in 2009.

Meanwhile, unemployment in May rose from 203,700 to 209,300. However, the number of people missing work due to the coronavirus fell from 118,900 in April to 69,800 in May, according to CBS figures.

National Insurance Institute director-general Meir Spiegler told Channel 12 that the new law “is balanced, gradual and provides a solution for quite a few populations that have fallen into crisis and have not yet found the ability to enter the labor market.”

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