Israel’s Treasury ministry presented plans to compensate employers and employees for the closing of its economy during the war with Iran, shocked at the rapid end of the operation against Iran. The Treasury has been working on several changes to its plan to coordinate it into rapid military development.
The initial changes by the Treasury are inevitably more generous and will help employers and employees even more. In the original aid summary presented, the state allowed workers to go on unpaid leave under generous conditions, while reducing the minimum unpaid leave period stipulated by law between 30 and 14 days. However, during the 12-day war, employees did not reach the 14-day threshold required to receive unemployment benefits from the state.
After consultations with Histadrut and employer representatives, the Treasury agreed to lower the requirement to 12 days. This will allow compensation for anyone who has been absent from work since June 13th. Initially, all workers who temporarily returned last Thursday were still excluded from the safety net. Many Israelis did this following an instantaneous easing of restrictions on the Homefront command on an economy that was once again reinforced after the US attack on Iran’s nuclear facilities. However, Histadl has since come to an understanding with the Ministry of Finance that prevents these employees from losing their qualifying for unpaid leave.
Under the understanding, “The period of absence qualifying for unpaid leave is 12 calendar days, and employees require that they be absent for at least 11 days, not necessarily consecutively, to be eligible for unemployment benefits.”
Retrospective unpaid vacation model
The unpaid leave model for a short war with Iran works retroactively. Those who have not worked throughout the surgery are entitled to National Insurance Institute of Unemployment Benefits, even if they register for unpaid leave after the surgery is over.
How does the Ministry of Finance prevent scheme abuse? First, employees who actually work do not agree to receive unemployment benefits only a few tens of percent lower than their regular salary, rather than a full salary. Additionally, national insurance agencies can check based on data they work and do not.
However, the Treasury remembers from the aid schemes of the past few years, inappropriate attempts to manipulate the law, taking unnecessary leave, even by those who have done their jobs, to obtain unnecessarily on leave, and to benefit from government assistance without work. Aid schemes including unpaid leave models are in effect until the end of the month. Therefore, the Treasury intends to amend the law that closes loopholes encouraging non-employment.
In contrast, in the past, there have even been cases of employers paying “black “black” and “black” by employers due to false registration of unpaid leave. The Ministry of Finance must prepare as much as possible to address the possibility of such inappropriate conduct.
Rethinking compensation for large corporations
The timing of publishing aid summary hours before President Donald Trump announced the ceasefire is not an issue from the Treasury Department’s perspective. From the beginning, we decided to issue details of the plan if strict economic restrictions lasted more than a week. However, they would prefer to publish retroactive plans once the event has already ended and costs are covered.
Therefore, most employers do not need to be afraid of cancelling or diluting grant programs for those whose income has been affected. The Ministry of Finance does not have that intent. The benefits announced in the plan will be implemented despite the suspension of combat. With one exception.
The Treasury plan, published earlier this week, proposed grant eligibility for businesses with annual revenues of up to 400 million. This is similar to the plans provided by the state after October 7, 2023. The difference is, this time, even the biggest companies in the economy can receive support from a special fund of 40 million people.
Treasury officials were never keen on this idea. Today, with the rapid end of military campaigns, we are no longer sure that the Treasury intends to send money to such a mechanism. This is based on the interpretation of agreements with the business sector, where tens of millions of shekels are to be put aside in the event of an extreme economic scenario. However, no final decision on this issue has yet to be made within the Ministry of Finance.
Published by Globes, Israel Business News – En.globes.co.il – June 25th, 2025.
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