Government, Business and Labor Agree on Compensation for War Damage

Finance Minister Yair Lapid called the plan an 'economic Iron Dome for residents of the south.'

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House damaged by rocket fire, July 16.
House damaged by rocket fire, July 16.Credit: AFP

Figures from government, industry and the trade unions on Wednesday agreed on a compensation formula for indirect losses suffered by residents and businesses in the south from Hamas rocket fire.

The formula, which has the backing of Finance Minister Yair Lapid, Histadrut labor federation chairman Avi Nisenkorn and Zvi Oren, the president of the Federation of Israeli Economic Organizations, applies to losses in areas up to 40 kilometers from the Gaza border. In a reference to the anti-missile system that has been intercepting rockets fired into Israel from the Gaza Strip, Lapid called the plan an economic Iron Dome for residents of the south.

The package calls for employers in the eligible region to pay salaries to workers who were absent from their jobs as a result of civil defense directives as well as workers with disabilities who were unable to get to work or remain there due to the security situation. The agreement also provides for the payment of salaries to staff at educational institutions that were closed due to the prevailing situation and to one of the two parents of each of the children up to age 14 who were attending those institutions.

As a practical matter, the pact calls for employers to pay their employees for the days not worked and then in turn to be reimbursed by the Tax Authority for the wages paid.

Draft regulations are also to be presented to the Knesset Finance Committee that would compensate business owners in the south for indirect losses due to the hostilities in the south. Assuming that the draft is approved, it will provide three simplified claims alternatives: one covering wage payments to employees who were unable to report to work; one to compensate business for a decline in revenue because of the war and an option for claiming compensation for additional business expenses as a result of the hostilities. Businesses within 7 kilometers of the Gaza border will have an option to provide actual proof of lost profits. There are also special provisions relating to losses sustained by specific types of businesses, including hotels, party centers and farms.