Knesset passes law expanding financial benefits for IDF reservists

The Knesset passed a law Wednesday to expand financial benefits for IDF reservists, ending weeks of delays that had triggered a legislative boycott by Finance Minister Bezalel Smotrich’s Religious Zionism party.

According to the new law, reservists who earn below the income-tax threshold will receive a monthly supplement averaging NIS 3,000 ($936) for each month of reserve duty, topping up their monthly incomes up to NIS 9,800 ($3,000). The law will be implemented starting in January 2026 and apply to service in 2025.

Those who serve at least 110 days of reserve duty per year will receive the largest tax credit. But the legislation also says that in 2028, when reserve-duty requirements are expected to shrink, the threshold for receiving the highest tier of tax credit would fall proportionally. The legislation passed with 26 MKs in favor and no opposition or abstentions.

“The law the Knesset approved today expresses the principle of simple justice: those who contribute more, receive more,” said Smotrich in a statement. “This is a Zionist, moral and economic policy. This is how you build a state that values its defenders, and this is how you create a real incentive for significant reserve service.”

Smotrich announced earlier this month that his far-right faction would refuse to vote with the coalition until the bill was brought for approval, causing a nearly weeklong legislative boycott until he and Prime Minister Benjamin Netanyahu announced a compromise last week.

“This law, which brings benefits to combat reservists, is a good law, but it is far from repaying the debt that Israeli society owes them,” said Knesset Finance Committee chair and Likud MK Hanoch Milwidsky.

The government approved the tax benefits in August and the legislation passed the first of three readings needed to become law, but it was held up in the Finance Committee for several weeks due to disagreements over who would actually benefit from the tax credit.

Milwidsky and other committee members had complained that there were significant economic disparities in the bill, which they asserted discriminated against lower earners.

“I’m very sorry, but I can’t shake the feeling that in the finance minister’s office they’re more concerned with how they look in the media — with making it seem as though they support the reservists and are doing something — while in practice, when it comes time to actually do the work, they’re not really doing it,” he told the committee last month.

Reservists have repeatedly complained about the personal and financial burden of their extended service since October 7, describing failing marriages, destroyed businesses, and other hardships.