Government extends unemployment benefits until mid-August

Netanyahu, finance minister reverse earlier decision to end payouts, which had risked leaving hundreds of thousands out of work with no income

Israelis, some wearing protective face masks, in Tel Aviv on June 24, 2020. (Miriam Alster/Flash90)
Israelis, some wearing protective face masks, in Tel Aviv on June 24, 2020. (Miriam Alster/Flash90)

Prime Minister Benjamin Netanyahu and Finance Minister Israel Katz announced Sunday that they were extending eligibility for unemployment benefits until mid-August, after previously saying the stipends would end amid the economic crisis caused by the coronavirus pandemic.

Israelis aged 67 or more who lost their jobs during the crisis will likewise be eligible to receive grants until the middle of August, according to a statement from the Prime Minister’s Office.

The eligibility will then be “reevaluated in light of employment data in the economy,” the statement said.

The prime minister and finance minister said they would quickly expedite the legislation allowing the extension.

In order to facilitate the rapid completion of the legislation, the necessary law change “will be entered as an amendment to the law on grants for people over 67, which has been tabled for its second and third readings in the Knesset,” it said.

Then-Foreign Minister Israel Katz during an emergency meeting at the Foreign Ministry in Jerusalem on February 13, 2020. (Flash90)

The decision was made following consultations with Bank of Israel Governor Amir Yaron and National Economic Council head Avi Simhon, the statement added.

The decision comes after the National Insurance Institute said that 469,314 people were in danger of losing their unemployment benefits by August, and after Welfare Minister Itzik Shmuli of the Labor party urged the premier to announce the extension.

“This is a ticking time bomb,” Shmuli said last week at a press briefing along with National Insurance Institute Director-General Meir Spiegler.

The Finance Ministry earlier this month announced it would not continue the benefits into July, before reversing that decision.

Closed stores at the Cinema City mall in Jerusalem, May 3, 2020. (Yonatan Sindel/Flash90)

Unemployment benefits generally run from 50 to 175 days, based on how long the applicant was employed before losing their job.

A lockdown imposed in mid-March to curb the spread of the coronavirus brought the economy to a near-total standstill and by April over a million Israelis had either lost their jobs or were put on unpaid leave. Unemployment jumped from around four percent before the restrictions to over 27%.

As the lockdown has been rolled back, the economy has begun to recover, but there has been a spike in new virus cases. Although there has been some recovery of the job market as the lockdown was eased in recent weeks, there are still about a million Israelis without work.

Rather than continue to extend the unemployment benefits, the Finance Ministry had previously sought to pay grants to employers who rehire those put on unpaid leave.

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