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Prime Minister Ehud Olmert decided last week that reserve soldiers will receive a monthly grant of NIS 360. The money will come in the form of a direct deposit into reservists bank accounts, though the sum will be set as the equivalent of an income tax credit worth two extra points.

The benefit was supposed to take effect this year, and would be worth up to NIS 4,320 a year to reservists - but it must be passed by the Knesset and actually implemented first.

Several hurdles remain before the soldiers actually can see any money, though. The defense establishment has yet to formulate the criteria for receiving the grant. The questions remaining include whether non-combat reserve soldiers will also get the grant, and how many days of reserve service a year will be required to receive the full sum.

Approval also depends on the Knesset passing a bill on reserve duty, when it reaches its second and third readings. Advocates hope it will be passed by the end of the current Knesset session, in April.

Last week, officials from Olmert?s office met with defense and finance ministry representatives to discuss the proposal. Treasury officials objected to the money being paid through income tax credits, and Olmert decided on the direct grant method instead. The prime minister ordered that NIS 180 million be budgeted for the grants in 2008, increasing to NIS 300 million in 2010.

The treasury also demanded that the money come from the defense budget, but the Defense Ministry and the IDF objected, and Olmert ruled that the funds will come from an across-the-board cut from government ministries.

The new reserve law has been stuck in the cabinet and the Knesset for a long time. The bill passed its first reading in the Knesset in 2005. Deputy Defense Minister Matan Vilnai is pushing the bill ahead, and Olmert removed one of the major obstacles last week before he took off for Japan.

The proposal would provide NIS 790 million a year in benefits for reserve soldiers, including NIS 400 million to raise the minimum payments reserve soldiers receive while on active duty. Currently, reservists who do not work or earn very little are paid only minimum wage, while the proposal would raise the minimum payment to NIS 5,000 a month.

Another NIS 300 million would be allocated for the grants, and NIS 90 million would go for various other benefits, such as scholarships and discounts. However, not all these sums would be allocated in the first year.

The new bill would also provide new benefits for employers. Currently, employers ? and the self-employed ? are reimbursed for reservists? days of service, calculated based on a 30-day work month. This means that for every day the reservist serves, the employer receives one 30th of the worker?s monthly salary from the National Insurance Institute. Under the new plan, reimbursement would be calculated based on a 21-day work month. This would raise the amount received by employers ? and reservists, in many cases.

The bill also would restrict the number of days reservists could serve, as well as the frequency of service. The new rules would limit active duty to 54 days for enlisted soldiers, 70 days for non-commissioned officers and 84 days for officers over a three-year period.

Other changes include preferences for reserve soldiers from various ministries, and a legal declaration that such favoritism would not be considered discriminatory.

The benefits could include loans for housing, preference in various tenders, university scholarships and lower purchasing taxes on items such as cars. However, these benefits have yet to be approved, either.