Economy Minister Nir Barkat Pushes for Reevaluation of Preferential Work Benefits
Economy Minister Nir Barkat has announced his intention to examine the controversial benefits of preferential work in the Israeli economy. Barkat expressed his support for canceling the preferential job grant tracks, which many believe are no longer relevant to today’s labor market.
Barkat stated in closed conversations, “the state invests hundreds of millions of shekels in preferential work for irrelevant professions. The right thing to do is to correct the distortion.” The grants cost the state over NIS 100 million a year, with the figure reaching NIS 120 million in 2022.
Under the current law, soldiers who have completed their national service and have worked for six consecutive months are eligible to receive a grant of NIS 10,481 starting from 2023. The list of those eligible for the grant includes professions such as gas station attendants, hotel cooks, cruise ship workers, carpet cleaners, and warehouse workers, but it was not determined by a government office or the National Insurance Institute. Instead, the list was determined by the Knesset.
The “preferred work” law was enacted in 1982 to encourage young people to enter the workforce, but critics have raised questions about its usefulness from the beginning. In 2014, a special committee comprised of the National Insurance, the Ministries of Economy, Welfare, and Finance submitted a report expressing concerns about the uncontrolled use of the grant. The report recommended various changes to update the list of eligible professions, but these attempts to change the law ultimately failed.
The number of young people eligible for the preferential job grant has decreased by 23% compared to 2014, with a decline from 16.6 thousand eligible individuals to 12.7 thousand in 2022. Possible reasons for this decline include the erosion of the grant’s value in relation to the average salary and the arbitrary selection of professions.
Many senior members of the economy are now calling for a change to the law. Uriel Lin, chairman of the Association of Chambers of Commerce, suggests that the state provide a grant to anyone who joins the workforce for at least a year after their release, regardless of the industry.
The National Insurance Institute has acknowledged the need for a change to the legislation regarding the work of discharged soldiers. They have attempted to promote relevant professions that could support the economic and professional future of young people, but these efforts have yet to result in any significant changes. The National Insurance Institute has expressed willingness to partner in any future discussions aimed at benefiting discharged soldiers.
As the debate continues, Economy Minister Nir Barkat’s push for reevaluating the preferential work benefits demonstrates the need for a comprehensive review of the current system. The aim is to align it with today’s labor market and ensure that the state’s resources are utilized efficiently while providing support to those who truly need it.