Full details of Israel's emergency coronavirus economic plan

The Cabinet approved the economic plan of Prime Minister Benjamin Netanyahu and Finance Minister Yisrael Katz – 'Safety Net 2020-2021'

Arutz Sheva ,

Netanyahu and Katz
Netanyahu and Katz
Hadas Parush/Flash90

The Cabinet approved a draft law that includes several issues in the economic plan that will require changes to legislation: Expanding the eligibility for unemployment compensation, adjustment stipends for those aged 67 and over, assistance to the self-employed and businesses, expanding the permit for discharged soldiers to make withdrawals from their discharge deposits, and a tax exemption for withdrawals from advanced training funds.

The Cabinet also approved a draft law to expand the 2020-2021 budgetary framework by NIS 24 billion in order to expand and implement the plan.

The draft laws will be submitted for Knesset approval immediately.

Following are details of the economic plan as approved by the Cabinet:

A) Safety net for wage earners on unpaid leave

1) Unemployment compensation benefits

* Full unemployment compensation until the end of June 2021 or until unemployment drops below 10%. When unemployment is below 10%, unemployment compensation will drop to 75% of the unemployment allowance

* Cancellation of the five waiting days between unemployment periods

* Shortening the qualification period from 12 months to six months

* Payment of double allowances until June 2021

2) Unpaid leave adjustment

* Shortening the administrative time for conferring eligibility for unemployment compensation to 14 days only. This will be submitted for Knesset approval in the draft law.

3) Adjustment stipend

* Payment of adjustment stipends of up to NIS 4,000 per month to those aged 67 and over until December 2020. This will be submitted for Knesset approval in the draft law.

4) Focused employment plan

* Coordinating and optimizing employment data – in order to receive an ongoing picture of the situation vis-à-vis the magnitude and characteristics of employment

* Goals – Determination of half-yearly goals for lowering the unemployment rate

* Training and placing workers – Broad increase in the scope of professional training and integrating employers in the training process. It was decided to establish a team headed by the Director General of the Prime Minister's Office and the Director General of the Finance Ministry to promote employment.

B. Safety net for the self-employed and for businesses

1) Unemployment compensation benefits

Immediate assistance stipend to the self-employed and to business owners for May-June 2020: The immediate grant has already been paid to over 300,000 self-employed individuals and business owners by the Israel Tax Authority and is expected to enter bank accounts in the coming days. Approximately one-third of those eligible have received the maximum stipend of NIS 7,500. The overall amount of stipends paid thus far stands at NIS 1.8 billion. The Cabinet approved the decision yesterday for immediate implementation.

2) Social assistance stipend for the self-employed and for business owners

Self-employed individuals and business owners with annual taxable income of up to NIS 640,000 who experienced a decline in turnover of at least 40% will receive a bimonthly-to-monthly stipend of up to 70% of the taxable income, up to NIS 15,000. This will be submitted for Knesset approval in the draft law.

3) Assistance stipends for businesses

Businesses and self-employed individuals with an annual turnover of up to NIS 100 million, and whose sales turnover declined by at least 40% in comparison to the parallel period will receive a bimonthly-to-monthly stipend until June 2021 as follows:

* Businesses with an annual turnover of up to NIS 300,000 – a small business bimonthly stipend of NIS 3,000-6,000 according to this schedule:

- Up to NIS 100,000 in annual turnover, NIS 3,000
- NIS 100,000-200,000 in annual turnover, NIS 4,000
- NIS 200,000-300,000 in annual turnover, NIS 6,000

* Businesses with an annual turnover of NIS 300,000-100 million, a fixed expense refund stipend of up to NIS 500,000 (up to 15% of the annual turnover)

4) New business assistance stipend

A bimonthly assistance stipend for businesses that were established in January-February 2020 will be paid until June 2021:

* Exempt businesses (up to NIS 100,000 in annual turnover) – NIS 3,000
* Exempt businesses (over NIS 100,000 in annual turnover) – NIS 4,000

5) Property tax assistance

Businesses with an annual turnover of up to NIS 100 million that experienced a drop of at least 60% in sales turnover will receive a refund for property tax expenditures for a business up to the end of June 2021.

6) Increased loans subsidized by state guarantee and improved conditions

* Expanding loans subsidized by state guarantees for small, medium and large businesses by approximately NIS 28 billion to NIS 50 billion.

* Loans of to 24% of businesses' turnover, the entry of additional actors and the possibility of taking loans from two different bodies and dealing with impediments to fully utilizing the framework

This is a significant expansion of the plan and will enable many businesses to receive credit on attractive terms. Expanding the fund requires the approval of the Knesset Finance Committee.

7) Business licensing

The validity of business licenses will be extended until the end of June 2021. This requires Knesset approval.

C. Additional issues

1) Tax-exempt withdrawals from advanced training funds

Withdrawals from non-liquid advanced training funds (six years and less) of up to NIS 10,500 per month (the average wage) will be tax exempt by emergency ordinance for six months. This will be submitted for Knesset approval in the draft law.

2) Expanding the permit for discharged soldiers to make withdrawals from their discharge deposits

Soldiers who have been discharged in the last five years may withdraw up to half of the balance of funds in the deposit for any purpose. This will be submitted for Knesset approval in the draft law.

3) NIS 3.5 billion in assistance to special populations for health and enforcement needs

* Senior citizens – Mapping and responding to the needs of the elderly

* The disabled – Responding to the needs of the disabled and populations at risk

* Reinforcing epidemiological investigations, checks, information and enforcement

* Citizens in quarantine and lockdown

4) NIS 5 billion acceleration plan

To be determined at a later date, according to – inter alia – the effectiveness of the project, the ability to carry it out and the effects on employment. The manner of implementation will be agreed upon at a later date.




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