Workers in Israel to Contribute More Than NIS 400 from Their Salary for Aid to Reserve Servants
In a recent announcement, Arnon Bar-David, the chairman of the Histadrut, revealed that every worker in Israel will contribute more than NIS 400 from their salary to finance the government’s economic aid to the reserve servants. This announcement was made Wednesday evening. However, in order for the agreement between the Histadrut and the Treasury to come into effect, legislation is still required.
According to the announcement, all employees will donate “one time, one recovery day to a reserve fund that will be established by the government for the treatment of reserve personnel and their families.” The issue was agreed upon between the Histadrut and the Ministry of Finance.
The value of each day of recovery is NIS 418 in the private sector, and NIS 471 in the public sector. Eligibility for recovery days is granted to any employee who has completed a full year of work for the employer.
It is estimated that about 2 billion shekels will accumulate in the fund, which will likely be used as a source of financing part of the grant program for reservists announced by the government, totaling NIS 9 billion.
Additionally, the statement from the Histadrut mentioned that “after a week of intensive talks between chairman Bar-David and the management of the Ministry of Finance led by Minister Bezalel Smotrich, the ministry returned from its intention to harm the tax benefits of the training and pension funds. At the same time, it was agreed between the parties to cancel the decree of freezing the minimum wage, and it will rise as expected in April to NIS 5,880, and accordingly will lead to an increase in the National Insurance benefits.”
In regards to the minimum wage, it was clarified that freezing the increase was not brought up by the Treasury and was not formulated as a concrete proposal. Bar-David also hinted at being flexible on some of the next pulses that are planned for horizontal wage increases in the public sector.
The possibility of canceling the coalition funds to finance the plan for the reservists without taking a contribution from the working public was also discussed, with Smotrich stating that there is money available. However, the Minister of Finance agrees to cut less than NIS 3 billion out of the approximately NIS 8 billion available in the coalition funds for 2024.
Overall, the agreement between the Histadrut and the Ministry of Finance comes as a significant development in the ongoing discussions and negotiations surrounding the economic aid for reserve servants in Israel.