Corona and Your Money

With the country practically shut down, there is a lot of confusion about employee and business owners’ rights due to the Corona virus and the effects it is having on the employment market. This article is an overview of the information that is currently available.

Before we get into details, I just want to share that I understand that this can be scary. Please do not panic, we are all in this together and I am here to help and guide and talk with. I truly want to help you live a financially smarter life even through rough times. Also, remember that this won’t last forever! We don’t know how long it will last or how long it will take to recover (since this depends on how long the restrictions last), but at some point, hopefully soon,  we will be back to normal and even to growth.

The government is continually making new announcements, so this article will update as new developments are released. Check back in daily or sign up for the Living Financially Smarter newsletter for updates.

1. If you were put on unpaid leave:

If you are employed and put on unpaid leave, the government will pay you unemployment if you have been working for at least 6 months. The government has eased the conditions, since normally you need to have worked 12 of the last 18 months to be eligible. The unpaid leave is paid only if you are off for more than 30 days. You will get paid for those 30 days. This is unrelated to/unaffected by how many vacation days you have.

To apply there are three things you need to do:

1. Follow this link to the Bituach Leumi website.
2. Have this form filled out from your employer: Form 1514בל and upload it to the Bituach Leumi site
3. Sign up at the unemployment office https://www.taasuka.gov.il/

Although the  Unemployment office (Lishkaat Taasuka) site says that you have to show up at their office, this appears to be inaccurate and applying online is sufficient.

As the Bituach Leumi site  had 500,000 requests last week, it keeps crashing. They are working on fixing that, but in the meantime you will need some patience and might need to apply at 4 am . Due to the issue on the website, if you apply by the 19^th of March, it’s considered as if you applied by the 15^th. Your unemployment is calculated from when you apply and you can only apply after you have officially finished working. Unemployment money arrives in your account on the 17th of the following month. This means that March unemployment will arrive AFTER Pesach, unless they change this, which they might. Please plan accordingly.

To understand how much unemployment money you can expect to get, use this calculator

Note: If you are over the age where you can receive pension rights or you are already collecting a pension, you aren’t eligible for unemployment from Bituach Leumi. If you are under 20 you are also not eligible for unemployment.

2. Freelancers and business owners:

In general, business owners and freelancers are eligible for fewer rights than employees. For instance, despite paying Bituach Leumi, they are not eligible for unemployment. This is offset by the advantages of business ownership, such as being able to choose your own vacation days and bill and work as you like. Freelancing (all over the world) has advantages and disadvantages and requires more financial planning than working for an employer.

However, due to the Corona crisis, the government has decided to step in and help freelancers and business owners by offering a grant, a loan, and, for specific professions, the possibility of collecting unemployment. The freelance professionals that can apply for unemployment include tour guides, artists, lecturers and teachers.

Details of who can apply and how are here https://www.btl.gov.il/benefits/Unemployment/Pages/avtala-marzim.aspx

For example:

Tour guides who apply need to provide these documents:

Salary slips for the past 12 months if they were employed

OR form 856 or או 857 from the tour company

OR joint document from the tour guide and אגודת מורי הדרך או ארגון מורשת דרך

*6050 is the Bituach Leumi hotline. I’m sure they are getting a lot of calls, so it might take a LOT of patience to get through to them.

General help for business owners:

Loans: The help being offered is a government loan that will be processed within 9 business days. These terms are much better than usual and were put in place now due to the Corona situation. Find details and apply for the loan here. https://govextra.gov.il/mof-gloans/

Grant – There will be  grant of up to 6,000 NIS for business owners (Patur and Murshe, not sure about Be’am) whose businesses are suffering due to the Corona situation.

These details are NOT FINAL

UPDATE March 31st.

You are eligible if:

– You are over 28

– Your business was active on or until 29/2/2020.

– Your taxable income in 2018 was under 240,000 NIS (or turnover under 300,000 NIS)

THIS is about to change April 14th 2020

– Your average monthly income in 2018 was above 2000 NIS. THIS too is about to change April 14th 2020.

– Total Annual income for both partners in 2018 wasn’t above 340,000 NIS (on a personal note, I presume this is after tax) ALSO about to change April 14th 2020. I’ll update this once the change is official.

– You declare that your 2020 March and April income was at least 25% less than March and April of 2019.

If you opened a business in 2019 you will only be eligible AFTER you do your 2019 tax documents.

The grant will be half of the business owner’s average 2018  monthly income or 10,500 NIS, whichever is lower. Once its ready you can apply via the income tax web site. I will update here when the site opens for applications.

https://www.mako.co.il/finances-news/israel/Article-861e1014d703171027.htm?sCh=3d385dd2dd5d4110&pId=1898243326

Every self employed person can do this on the income tax web site, or ask their accountant to do it for them. Here is the link to apply https://www.btl.gov.il/benefits/Unemployment/covid19_avt/Pages/azmeim.aspx

Or here 

VAT – The VAT office is allowing the January and February VAT payment to be made late. The date was moved from March 15th to the 26th and is now April 27th. Bituach Leumi and income tax must be paid on time! If you are set up for them to automatically withdraw from your account with a הרשאה לחיוב חשבון (standing order) you will only be billed on April 27th. Otherwise, you pay whenever you do your  VAT report, as long as it is before April 27th. If you pay VAT every month, you do not get this extension.

Bituach Leumi – Announced that they will allow freelancers and businesses to reduce their prepay percentage, as it was based on 2019 income which is not a relevant number anymore. This needs to be requested on the Bituach Leumi website. They also will allow late payment for April.

Business utility payments – Arnona/municipal tax can be delayed by a month if needed. Water and Bituach Leumi can be delayed. The electric company is billing as usual but has said that they won’t disconnect people who are paying late.

Regarding the payments that can be paid late, my tip is to assess your financial situation before making a decision. If you can pay, don’t wait, otherwise, after this is over you could find yourself owing money and in a mess.

3. Mortgages – Can we just delay paying by 3 months?

Yes you can. In fact, you always had this option, it wasn’t opened for the Corona situation. Here is how it works:

• The banks allow this option for someone who is unemployed or can’t afford to pay for some other reason.
• For the 3 or 4 months that you don’t pay principal or interest, that money gets added to what is owed and then every month following this you pay a little extra.

What this means is that you are sorting out your (HOPEFULLY) short term problem with a long term solution. If you have the option to borrow money now and repay it in 6 months, this is a better idea. You will only have to pay interest on a six-month loan, instead of for many years to come. Another consideration is that we don’t know how long this will last. What will happen in three months when you have to pay again? Will you be able to? As you can’t delay it twice now, keep in mind that this is a once-off thing (at least for the next few years).

If you can find another way to get through this time without delaying your mortgage, I would recommend it. But if you need to use it, call your bank (or if you are in Mizrachi, you can fill out an online form). Make sure these three things are in place if you do this:

• The mortgage interest  rate does not change.
• There is normally a fee to do this, it’s currently waived due to the Covid-19 virus.
• The Bank of Israel has announced that this will not affect your credit rating.

If you choose to do this you can reach the banks at the numbers below. (Well, you can try. They had 6,000 calls the other day and were not able to answer everyone.)

• Leumi *6062 – can freeze mortgage for up to three months.
• Discount *2009 – can freeze mortgage for up to three months.
• Poalim *2401 – can freeze for up to three months.
• Mizrachi Tefachot – *8860 – can freeze mortgage payments for up to 4 months.
• BeinLeumi – *3009 – can freeze for up to three months.

Many banks have now said they will allow you to delay paying back loans for 3-6 months, if you have a bank loan and need to delay payments its worth checking this option with your bank.

4. Maternity Leave

If you are a self-employed woman whose income has dropped due to the Corona virus, your maternity leave will be calculated according to this year’s income or last year’s, depending on which one is HIGHER.

If your hours have been cut due to COVID-19, your maternity leave will be calculated according to the amount you were earning before your hours were reduced.

If you have been put on unpaid leave while pregnant, your maternity leave will be calculated according to the salary you received before your unpaid leave began.

 5. I have been unemployed for a while, what happens to my unemployment rights?

If your unemployment rights would have ended before the 15/March/2020 your rights are over.  If your unemployment rights ended after 15/March/2020, your rights will be extended until 16/April/2020..

Most importantly, Refuah Shlema to everyone who is sick, may you have a speedy recovery.

Praying and hoping we are all able to get back to our normal soon,

Rifka Lebowitz

Questions we will answer soon and add here:

Employed but your salary was cut – what are your rights?

Single mums – You might be eligible for Hashlamat Hachnassa

What happens to my pension fund if I am on unpaid leave? Part of it still gets paid. 

What about Maon, or private Gan, do I still have to pay?  Take a look at this article, I have not yet translated it. 

Disclaimer: We take no responsibility for this information. We are offering this as a public service based on what we read on news sites.

*If you want to use this information for your social media, blog or website   share the page link or please ask permission and credit Rifka Lebowitz Financial Consultant www.rifkalebowitz.com.