Photo Credit: Kobi Richter/TPS

Prime Minister Benjamin Netanyahu and Finance Minister Israel Katz reportedly secured Cabinet approval for draft legislation that provides a 67 percent supplement to work stipends — that which is known as the “negative income tax” — for April-December 2020, as well as the expansion of eligibility for the assistance grant for small businesses, to share in expenditures.

According to the draft legislation approved by the Cabinet, the allocation of an advance against the supplement to the stipend is to begin immediately, and is to be paid to people found eligible for the work stipend (wage-earners and the self-employed) for 2019, at a rate of 25 percent of the overall stipend for that year.


Also, the advance will be paid together with the base stipend to people found eligible for the base stipend for 2020. The balance of the supplement will be paid together with the base stipend during this year. It was also determined that the overall supplement for the 2020 work stipend will not be less than NIS 1,000.

However, according to the draft law, wage-earners who – according to National Insurance Institute data – received unemployment compensation for the entire April-July 2020 period, will not be eligible to receive the advance for the stipend which is designed to encourage participation in the labor market.

Additionally, and in order to immediately assist small businesses, a decision was approved to ease conditions for business people whose business turnover in 2019 was less than NIS 300,000 per month, and to determine that they will be eligible for the stipend for sharing in expenditures for May and June 2020, even if the reduction in their business turnover is less than 40 percent, as long as it is over 25 percent of business turnover in the parallel period from before the outbreak of the virus.

The budgetary cost of these two moves is approximately NIS 1 billion.

In order to allow the Israel Tax Authority to begin transferring the payments before the holidays, the relevant draft legislation was submitted Monday evening for its first reading in the Knesset plenum.