The Knesset Finance Committee on Wednesday passed a motion that will grant frontline status to Sderot and other communities near the Gaza Strip.

These southern communities have been bombarded by Qassam rockets, fired into Israel from the Gaza Strip, causing damage to buildings and fields, injuries and deaths.

The new status will enable residents to receive special protection packages, certain tax breaks and other benefits.

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The motion will allow business owners to apply for compensation for damage caused indirectly by Qassam attacks from May 16th when the large-scale rocket fire from Gaza began, up until August 31.

The motion's approval is the first step for Sderot and western Negev communities in receiving compensation for indirect damages caused recently by Qassam attacks.

During the meeting on Wednesday, the committee also approved a package of NIS 17.3 million in city tax discounts for residents of Sderot and the western Negev. The compensation package is expected to cover 25 percent of city taxes that residents would normally have to pay.

The Knesset Finance Committee will vote on approving the specifics of the payment of compensation for area business owners next Wednesday.

Currently the motion proposes compensation for local business owners that will pay up to 65 percent of their normal annual revenue for the period of time covered by the compensation plan.

MK Shai Hermesh (Kadima) said he is handling negotiations with the Finance Ministry under which business owners will receive an advance payment of 50 percent of the gap between their normal revenue and the revenue accrued during the past two weeks of intense Qassam fire.

Under Hermesh's plan, the advance payment will be paid within 14 days from the moment a claim is filed.

The Finance Ministry expects to finish in coming weeks distributing compensation to business owners who file claims.

The Ministry of Trade, Industry, and Labor has voted recently to give assistance to small and medium sized businesses in the Sderot area. The ministry has also submitted a motion to the government to start a fund that will provide $150 million in assistance to those who have fled Sderot and the surrounding area. The motion would also provide guidance to local small businesses in the Sderot area.

The ministry is also considering given Sderot area businesses exemptions from paying income tax, sales tax, and insurance.