Israelis will not receive unemployment benefits and stipends before Passover

National Insurance Institute chief says his organization is overwhelmed and behind schedule because of rising coronavirus-related joblessness

National Insurance Institute's Director General Meir Spiegler at a conference at the Jerusalem International Convention Center (ICC) on September 3, 2018 (Yonatan Sindel/Flash90)
National Insurance Institute's Director General Meir Spiegler at a conference at the Jerusalem International Convention Center (ICC) on September 3, 2018 (Yonatan Sindel/Flash90)

Israel’s National Insurance Institute is overloaded by the massive surge in claims brought on by the coronavirus pandemic and will be unable to transfer unemployment benefits and emergency stipends before the upcoming Passover holiday, its director general announced over the weekend.

“Unfortunately and despite great efforts, we will not be able to meet the schedule and deliver the unemployment benefits,” Meir Spiegler told Hebrew daily Maariv, adding that while he hoped that emergency stipends for children may be processed before the holiday this week, those for the elderly definitely won’t be.

“We usually handle 17,000 unemployment benefit requests every month, but we now have more than a million. This month, we will pay 700,000-800,000 advances of NIS 1,000-2,000 for workers who were put on leave. The systems are not built for more than that,” he said.

Earlier this month, Israel registered more than a million jobless citizens for the first time in its existence, as the coronavirus pandemic was putting more and more workplaces out of business.

An Israeli man receives service at the National Insurance Institute (illustrative photo: Flash90)

Almost a quarter of Israel’s workforce — 24.9 percent — is now jobless, including some 160,000 people who had been unemployed before the crisis. The National Employment Service said Friday that the number of unemployed stood at 1,039,791.

“The full unemployment benefit will be paid on April 12,” Spiegler told Maariv.

Prime Minister Benjamin Netanyahu last week announced that families would receive a one-time payment of NIS 500 per child (approximately $140), up to the fourth child, ahead of the holiday. He also said that there would be stipends for the elderly, and that the payments would be approved via emergency legislation and deposited directly into bank accounts, with no bureaucratic red tape.

Prior to the holiday, some 2.75 million Israelis under the age of 18 will receive their regular child benefits totaling some NIS 1 billion (approximately $275,004,900). Unemployed veterans and those receiving assured income will also receive payments prior to the holiday.

Asked what would happen if the situation does not improve, Spiegler told Maariv that in May the National Insurance Institute would have to pay out NIS 6 billion (approximately $1,650,029) in unemployment and that the government will be able to pay workers on leave for anywhere between two to six months, depending on age and status.

A man passes shuttered stores on Jaffa Street in Jerusalem on March 25, 2020 (Yonatan Sindel/Flash90)

Last Thursday, the cabinet approved emergency grants for self-employed Israelis whose businesses have been hit by the coronavirus pandemic.

The vote, held via telephone, was part of the government effort to bolster small businesses, which are especially vulnerable to the economic shutdown put in place to stymie the spread of the virus in the country.

The funds will go to businesses that have seen at least a 25 percent decline since the start of the crisis in Israel in March, compared to the same period last year. For businesses that began operations after March 2019, the sum will be calculated against their average monthly income until the crisis. The business must have been in operation between September 1, 2019, and February 29, 2020.

The grant will only apply to people whose average monthly income is over NIS 2,000 ($550), and under NIS 20,000 ($5,500), and over age 20. Recipients will receive 65% of their average monthly income, but no more than NIS 6,000 ($1,640). Self-employed people who make NIS 16,000-20,000 ($4,400-5,500) per month will receive NIS 3,000 ($820).

The Tax Authority will distribute the funds, and interested self-employed workers can apply on its website. The authority said the grants would likely be disbursed before the Passover holiday. A second wave of grants meant to cover April expenses is expected to amount to as much as NIS 8,000 ($2,000) for each recipient, the Calcalist business daily reported.

Luke Tress contributed to this report.

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