Unemployment benefits that were due to expire this month will be extended until mid-August, Prime Minister Benjamin Netanyahu and Finance Minister Yisrael Katz have decided. In addition, workers on furlough and people aged 67 and up who haven’t returned to work will also be entitled to continue receiving special grants. At a later stage, the matter will be reexamined in light of future unemployment rates.
The decision was made after consultation with Bank of Israel Governor Amir Yaron. To allow a swift legislation process, this clause will be added as an amendment to the bill granting people aged 67 and up special benefits, which awaits a final vote.
Last week, Labor Minister Itzik Shmuli and National Insurance Institute Director General Meir Shpigler warned that 262,000 Israelis could find themselves without a job, unemployment benefits or other income at the end of June after their benefit period expires. Treasury officials disputed those claims and said that special grants were meant to encourage employers to bring as many employees as possible back to work. An estimated 500,000 to 700,000 of those who lost their jobs due to the pandemic have not returned to work.
The government has not come to the aid of some 100,000 small- and medium-sized business that are still closed, in some cases because they are in sectors that are still shut down such as events and tourism.
Last week Shpigler estimated the cost of extending the unemployment benefits, together with the cost of ending the policy of deducting other benefits from unemployment compensation, at around 3.8 billion shekels ($1.1 billion).
Many countries have expanded their unemployment benefits in response to the coronavirus crisis. According to the National Insurance Institute, Canada and the Netherlands have extended their support to August, while the United States has extended benefits to November. Switzerland added three months to the unemployment benefits period, Britain has extended jobless benefits to October. New Zealand extended their programs to September, while in Singapore unemployment benefits won’t expire until December.
Shmuli praised the decision and said he will continue his battle to guarantee “that no Israeli is left behind.”
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Economy and Industry Minister Amir Peretz also welcomed the decision, noting that he had demanded the extension of eligibility for unemployment benefits during meetings of the socioeconomic cabinet.