The Treasury Minister, Betzalel Smotrisht and the National Insurance have reached an agreement to promote a Bezek Law for the full cancellation of debts incurred by self-employed reservists. Along the promotion of this law is offered the legal possibility to freeze those debts until the enactment of the law.
As a reminder, the existing law provides a reserve service benefit at the end of the service period and not a monthly payment. Besides, the calculation of the reserve service benefit for the self-employed is based on the advances declared to the National Insurance by the self-employed.
This new bill of law to be promoted by the Minister of Labor, Yoav Ben Tzur, proposes to modify the existing legislative situation and prescribe that payment of reserve service benefits shall be based either upon declared or paid advances by the self-employed reservists until October 31, 2024, or upon final tax assessment - whichever represent the higher basis.
- It is underlined that the draft offers a retroactive response for those who incurred a debt for the year 2023 and repaid it, which upon enactment of the law will be canceled.
- In addition, the new draft will also provide a solution for 2024 for those who are not yet in debts (since income tax assessment is only sent by mid-2025 or end of the year). As said, enacting this law will offer a general answer for a number of complex cases stemming from prolonged combat situation.
- This morning, a draft of the new law was forwarded to the Treasure Ministry, promoted by the Labor Minister according to an agreement to change the existing legal situation and solve this matter.
- This also involves the legal capacity to freeze debts temporarily.
It is stressed that this freeze does not constitute a debt cancellation, and that debt will be fully cancelled (retroactively too) upon the enactment of the law.
In the event the law failed to be enacted, the debt will remain outstanding and the National Insurance will be constrained to pursue its collection under and according the existing law. - Along with the promotion of this bill of law, the National Insurance will actively contact self-employed reserve soldiers who have already repaid debts and offer them a new installment plan or a temporary refund of the sum repaid until the enactment of the law.
- Payment of reserve service benefit for the self-employed will continue per usual with a 25% increment (by contrast with salaried employees), as a special increment for the self-employed, such as business maintenance, current expenses, and such, to which they are entitled by law.
Michaela Cohen - National Insurance's spokesperson
Eitan Fold - National Insurance's spokesperson