Lawmakers approve plan to compensate businesses harmed by war with Iran

By Sam Sokol 21 July 2025, 6:44 pm

Edit

Sam Sokol is a former political correspondent at The Times of Israel. He was previously a reporter for the Jerusalem Post, Jewish Telegraphic Agency and Haaretz. He is the author of "Putin’s Hybrid War and the Jews"

Israeli emergency services work at the site of an Iranian missile attack in Ramat Gan on June 19, 2025. (GIL COHEN-MAGEN / AFP)

Lawmakers vote 55-2 to approve, in its third and final reading, the government’s plan to compensate those affected financially by last month’s conflict with Iran, including grants for businesses whose income streams were reduced and workers who had been furloughed.

“We worked together here, coalition and opposition,” says Shas MK Yinon Azoulay. “Our prayer is that we will not need more compensation.”

The outline, whose aim is to create “as broad a safety net as possible for the working public,” was presented at a joint press conference last month by officials including Finance Minister Bezalel Smotrich, then-Knesset Finance Committee chairman Moshe Gafni, Business Sector Presidium chair Dubi Amitai, and Histadrut Labor Federation chief Arnon Bar-David.

According to the Finance Ministry, the outline is focused on maintaining economic “continuity,” with an emphasis on small and medium-sized businesses. Businesses with an annual turnover of NIS 12,000 ($3,450) to NIS 400 million ($114 million) that has decreased by more than 25 percent month over month will be compensated from the Property Tax Compensation Fund.

Businesses bringing in less than NIS 300,000 ($86,000) a year will be eligible for a fixed business continuity grant “depending on the level of damage to the business,” while businesses earning NIS 300,000 to NIS 400 million will be eligible for the reimbursement of 7%-22% of their expenses, “depending on the rate of damage to business turnover, as well as a refund of 75% of salary expenses in relation to the level of damage.”

Businesses with an annual turnover of NIS 300,000 to NIS 100 million ($28 million) will have compensation capped at NIS 600,000 ($172,000).

Employees placed on unpaid leave due to the cessation of economic activity during the war will receive payments from the National Insurance Institute and will not be forced to use any of their accrued vacation days.

Progress on the compensation law was temporarily halted last week when then Gafni quit his position as part of his ultra-Orthodox United Torah Judaism party’s exit from the coalition. Gafni was quickly replaced by coalition whip Ofir Katz as lawmakers hurried to pass the legislation before the pending Knesset recess.