Zelekha's Last Bombshell: Taxes on VIPs' Free Medical Treatments

Accountant General Yaron Zelekha is not going quietly: In one of his last moves before Finance Minister Roni Bar-On attempts to end his tenure, Zelekha is initiating a major change for a very influential group of former politicians. He is demanding that 400 former VIPs who receive state subsidized medical and nursing home care pay taxes on these benefits.

The Accountant General's Office has asked the Health Ministry and the Tax Authority for their opinions.

The benefits for the former VIPs now amount to NIS 13 million a year. The benefits were granted in the 1950s, when the original group of beneficiaries - judges - requested not to belong to the health funds which were all linked to political organizations. Then prime minister, David Ben-Gurion, decided to grant free medical care to those judges who did not want to identify with any specific political party.

The benefits were widened to more and more former VIPs: minister, MKs, judges, chief rabbis, religious court judges and ministry director generals among others - but the perk was scaled back and only those who took office before 1986 are now entitled to the free medical care. The insurance also applies to spouses, and certain dependents.

The group of 400 is divided into two: those with full rights including former Supreme Court justices, ministry director generals and chief rabbis.

These VIPs receive benefits include purchasing medicine not included in the health basket, free private medical treatments and consultations, health insurance overseas and other payments.

The second group includes judges, ministers and MKs who have more restricted rights to repayments.

Both groups do not receive dental care, plastic surgery or treatments overseas.

The costs can reach tens of thousands of shekels a year, but it is tax free. As the benefits also include nursing home care, in some cases the sums can reach more than NIS 10,000 a month, or over NIS 120,000 a year. About 70 percent of all the expenses, some NIS 9 million a year are for such care.

The treasury is considering several proposals on how to tax the benefits. One idea is to simply tax all the benefits according to the actual amount paid out. Another proposal is to set an artificial sum that will be considered taxable for all such VIPs. No decision has yet been made, and the matter is still under discussion between the ministries.

The Tax Authority said it is examining the matter in the wake of the accountant general's request. Zelekha's response was not received before closing.