“There is presently a wave of layoffs. Watch for a significant increase in the number of unemployed in 2009,” Welfare Minister Yitzchak Herzog stated Tuesday, requesting that the Finance Ministry complete its economic relief plan by implementing measures that would benefit the unemployed.
Welfare Minister Herzog, and the director-general of the National Insurance Institute (NII), Esther Dominissini, presented last month a wide-scale plan to deal with the financial crisis, which has significantly increased the number of unemployed.
The plan’s main points are the shortening of the eligibility period to receive unemployment compensation and extending the period of receiving unemployment benefits. The cost of funding the program in the immediate future is estimated to cost the State’s coffers half a billion shekels.
The Finance Department announced its attention to approve an economic relief package, aimed at reducing corporate taxes, which Minister Herzog stated only partially remedies the situation since it does not provide for immediate relief for the unemployed.
The first component of Herzog’s plan is the reduction of the waiting period for an unemployed worker to receive benefits. Instead of having to work for a year within an eighteen-month period, some of the unemployed would be able to receive unemployment benefits after as little as working six months out of a year. The second factor of the plan is the extension of the period that the unemployed are entitled to receive benefits. At present, some unemployed workers are only eligible to receive 50 work days of payment.
Officials from Herzog’s Ministry explained that as a result of more stringent criteria for receiving unemployment benefits in the last few years, NII has reduced unemployment payments by 2.5 billion shekels. Similarly, the number of unemployed who are eligible for benefits has dropped from 50 percent to only 25 percent.
“It is unreasonable that part of the plan that we presented would be adopted while the main response to deal with the situation would be pushed aside. The plan’s main advantage stems from the fact that in order to actualize its main components, no change in legislation is needed, and the plan can go into effect by activating existing jurisdiction within the National Insurance Law. I call upon the Finance Ministry to complete the plan as soon as possible by including its main components. The State of Israel, from an international perspective, is on the bottom of the ladder in regards to the period of eligibility, the period of payment, and the amount paid to the unemployed. Even in the U.S., the citizens are eligible to 300 unemployment days, whereas in Denmark, they are eligible to not less than 1,200 days,” Herzog said.
NII director-general Esther Dominissini stated, “In a time of crisis, as we are presently experiencing, we must match the most appropriate tools for solving the problems. The main problem that is getting worse is the rise in the number of unemployed. There is therefore no alternative other than cutting the eligibility period and to make accommodations in the period of eligibility. The social safety net of the NII is precisely geared for this.”