Israel's Finance Ministry announced on Tuesday that it will end unpaid leave benefits for unemployed people aged 45 and under at the end of June, as coronavirus' effects on the economy recede.
However, the allowances will continue until December 31 for some groups, including the disabled, single mothers and women aged 62 to 67. Maternity leave allowances will continue for salaried mothers who were unemployed for a long period during the coronavirus pandemic, while unemployment payments won’t be cut for those unemployed who are receiving job training. The cuts must be approved by the cabinet and the Knesset.
The Finance Ministry said that since the economy reopened in early April, recovery has been swift. “The unpaid leave policy was relevant in a world of lockdowns, and now it’s detrimental to the economy,” a ministry official said. “The minister wants a solution for people who still need it.” Those aged 45 and over are returning to the job market more slowly, and there is still excess unemployment, although the economy is in full operation, the ministry said.
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The Finance Ministry and the National Insurance Institute recently discussed the NII demand to continue dual allowances to those eligible and to extend maternity allowances for long-time unemployed women who became pregnant during the pandemic. About 25,000 people are eligible for both an allowance and unemployment payment simultaneously, at a cost of 41 million shekels ($12.5 million), and 3,760 women who have been unemployed for a long time gave birth during the pandemic and receive a maternity allowance.
A mother of two toddlers who hasn’t worked since 2020 said in response to the ministry’s decision: “I’ve been looking for work for several months, and nobody got back to me.”
Compensation for unpaid leave will also end for disabled people who are under the age of 45. Yehonatan Shayovitz, a 36-year-old deaf man, told Haaretz: “I don’t yet know what my future will be from July. To be deaf in the job market isn’t so simple. I think the Finance Ministry didn’t consider that it takes people with disabilities longer to find work.”
The so-called adjustment grant that given to those 67 and older during the pandemic has also been cancelled. Sinaya Cohen, a 67-year-old tour guide who was laid off during the pandemic, is concerned. “We’re moving towards poverty, depression, shame and grief,” she said. “We worked all our lives, I’m not young, and I don’t know what to do. We used to get 4,000 shekels every month, and that helped a lot. I have friends who are cleaning houses.”
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Before COVID-19, some recipients of subsistence allowances couldn’t receive full unemployment payments because of a ban against receiving “dual allowances,” and received either unemployment benefits or the allowance – not both.
Finance Minister Avigdor Lieberman commented on Tuesday: “There are over 130,000 available jobs, so clearly the broad unpaid leave policy isn’t the right thing. But there are some problematic industries, older unemployed people and weaker populations – we mustn’t abandon them. Those who can’t return to full employment, like tourism workers, will receive a partial allowance.”
The Headquarters for Promotion of Employment, which represents 34 social organizations, said in response that the Finance Ministry’s decision will have serious consequences for hundreds of thousands of unemployed who cannot find work.
Tali Nir, the head of the 121 Engine for Social Change organization, said that “this approach is particularly shocking, since according to a study by the Finance Ministry’s chief economist, most of the vacant positions in the market require skills that most of the unemployed do not have. Especially worrisome is the situation of unemployed people with disabilities or single mothers under 45 years of age, who will remain with no unemployment benefits even though t’s clear that they will be the ones facing the most difficulties in returning to work.”