After June 30, unmarried people under age 28 will not be entitled to any additional unemployment benefits, according to the Finance Ministry’s new economic safety plan revealed on Tuesday.
The long-awaited plan provides an outline for unemployment benefits from July 1 through the end of 2021. The economic safety net plan that went into effect last year when the coronavirus pandemic started had provided job seekers with unemployment benefits through the end of June. Critics say that model incentivized people not to go back to work, by essentially promising a paid vacation for unemployed workers. The Finance Ministry, working with the National Insurance Institute, was charged with designing a plan that removed this incentive while still providing for the hundreds of thousands who are still legitimately struggling to find work due to the corona crisis.
On Monday, the Central Bureau of Statistics (CBS) said that the jobless rate for the first half of May had fallen to just 6.7%, compared with 7.9% for April and 9.5% for March. That decrease, spurred by Israel’s successful vaccination campaign, has helped Israel come out of crisis mode faster than expected.
Under the new model, job seekers will be given a maximum number of days they can receive unemployment benefits, based on their age and number of dependents. Thus, people under 28 without children will receive no more employment days in 2021, while other demographics will be eligible for between 25 and 88 days of benefits. The highest bracket of 88 days is for people above age 45, or above 35 with three or more dependents.
Among other conditions:
• In order to encourage people to seek professional retraining, a 30% reduction in benefits for people in retraining will be canceled.
• Mothers who recently gave birth will be allowed to continue the unemployment benefits they were receiving before the birth until the end of 2021.
• A special adjustment grant for those 67 and over will be extended gradually for the months of July-August.
• Individual will be required to work for nine months out of the last 18 months to qualify for benefits. Under normal circumstances, the National Insurance Institute (NII) used to require 12 out of 18 months, but that was shortened to six out of 18 during the pandemic.
In addition, workers who take jobs at lower salaries than their previous position can receive grants for up to four months making up the difference.
Employers hiring new workers who have been out of work for an extended period of time will be entitled to a grant worth 20% of their gross salaries. The money will be granted after the employee has worked for five months, and is capped at a salary of NIS 10,500.
“The data from the CBS proves what we had been claiming all along: those who lost their livelihoods during the corona crisis were desperate to return to work,” said NII Director-General Meir Spiegler. “However, we emphasized that people age 35 and over are having difficulty finding work, and it is clear that they cannot be left unanswered.”
The Manufacturer’s Association applauded the plan.
“I congratulate the Finance Ministry on its decision to restrict unemployment benefits and stop paying unemployment benefits to young people without children up to the age of 28, in order to heal from the disease of the previous unemployment benefits plan,” said the organization’s president, Dr. Ron Tomer. “I hope that future programs to restrict unemployment among other ages will be done with the unemployed in mind, but also with the understanding that there are 130,000 job vacancies in the economy, and therefore a real incentive must be created among the unemployed to return to the labor market. This is in addition to supporting the growth engines of the economy, especially in industry, in order to create new jobs in the economy.”