Nearly 1.2 million Israelis have contracted coronavirus and many more have had to self-isolate because they or their children came into contact with those affected.
The need to self-isolate is not only worrying, it affects our finances if we cannot work. So it is useful to know that since October 2020, employers pay isolation pay to employees and the National Insurance Institute partly reimburses the employers, subject to various rules.
The government is in the process of making changes to the isolation pay rules, some for the better, some not quite (via Economic Aid Program (New Coronavirus)(Ad Hoc Provisions)(Amendment 6), Law 2021). Below is a brief summary.
Basic rules
Isolation pay is payable to Israeli and foreign resident employees forced into self-isolation (quarantine), unless it stems from a trip abroad unrelated to work for the employer. The amount of isolation pay is the employee’s regular pay, except for the first day’s isolation. But the employee might claim the first day out of his annual vacation allowance. The isolation pay relates to days’ absence from the place of work, i.e. work days not Shabbat, not Fridays for people on a five-day week.
Employees can claim 100% of their regular pay (but see below regarding unvaccinated). But if they are sick, they fall under the rules for sick pay instead of isolation pay.
Employees in isolation generally cannot be dismissed unless notice was given before the absence began (or if the employer goes bankrupt or closes the workplace). The employee must have notified the isolation on the Health Ministry’s website promptly within four days after the isolation began. If the employee is late, the isolation pay claim cannot go back more than four days – the rest is forfeited. The employer makes its claim on the National Insurance Institute online system.
The isolation pay counts as salary for all purposes including income tax, national insurance, pension rights and employment period.
Timeframe for latest changes
The changes are effective as of August 5 and apply until October 31, 2021. But claims for isolation pay under the new rules can only be filed after October 15, 2021.
Claims for isolation pay under the old law can be filed by October 15, 2021 regarding corona isolation that began on or before August 4, 2021.
We review below the main changes.
Parent Minders
Perhaps the biggest improvement concerns parents with children forced into isolation. Isolation pay is now payable to parents of children who looked after children in isolation. Better still, it will be retroactive for isolation beginning on or after January 1, 2021. This applies to children under age 16 or children with special needs.
A parent that minded a child in isolation can claim full isolation pay under the old rules retroactively from January 1, 2021 to August 4 if the case was reported at the time to the Health Ministry and the parent was vaccinated against corona or recovered from it.
The parent must provide a declaration to the employer that they were the only parent looking after the child. The employer must accept it.
If the parents split the looking after between them, they declare this to their respective employers. The National Insurance Institute will deduct the first (non-payment) day from one parent only.
An unvaccinated parent gets full isolation pay from August 5 but nothing before then and cannot split with the other parent.
Unvaccinated employees
For isolation beginning after August 4, unvaccinated employees can now only claim 75% (not 100%) of their regular salary, unless the employee provides the employer with medical confirmation that they were prevented from being vaccinated.
Maximum claim period
The maximum period for which isolation pay can be claimed has been reduced from 14 to seven days. The period is extended up to the receipt of the second corona test result if tested on the seventh day itself. The period is also extended if the employee is unlucky enough to receive a second isolation instruction.
Employer Reimbursement
Commencing August 1, 2021, an employer can claim 75% reimbursement of isolation pay paid to employees if the workforce numbers up to 20 employees, or 50% reimbursement if there are over 20 employees. Before that date the reimbursement was up to 100%. And from August 5, 2021, the employer may claim reimbursement of employment costs (pension, national insurance, etc) of up to 30% of their salary. Claims must be made within 90 days (previously 60 days).
For more information
Call the National Insurance Institute help desk at 02-6393722 or the Health Ministry help desk at *5400.
As always, consult experienced advisers in each country at an early stage in specific cases.
The writer is a certified public accountant and tax specialist at Harris Horoviz Consulting & Tax Ltd
leon@h2cat.com