Seniority increment


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The seniority increment is added to the basic pension rate to which you are entitled (based on your age and personal status).

The seniority increment is calculated according to the years of insurance contributions accumulated, as detailed below. Is considered as a full insurance year, 12 months of insurance contributions, whether consecutive or not.

The maximum rate of seniority increment that one may receive is 50% of the pension.

Calculation method of the seniority increment:

Until December 2016, the increment was calculated as follows: for every year of insurance, beyond the first 10 years of insurance, was paid a seniority increment at a rate of 2% of the basic pension to which you were entitled.

From January to December 2017, the increment was calculated as follows: for every year of insurance, over the first 9 years of insurance, was paid a seniority increment at a rate of 2% of the basic pension to which you were entitled.

Since January 2018,  there is a different calculation method of seniority increment for old-age pension recipients with a seniority increment below 50%. The seniority increment will be increased gradually in two stages, and calculated as follows:

  • As of January 2018, a 2% seniority increment will be paid for every year of insurance contribution beyond the first 4 years.
  • As of January 2019, a 2% seniority increment will be paid for every year of insurance contribution, i.e. from the first year.

Example 1:

A man who first immigrated to Israel in January 1987, and reached retirement age in April 2017. He has accumulated 30 full years of insurance contributions and receives an old-age pension since April 2017 with a 42% seniority increment based on the following calculation:
2% for every year beyond the first 9 years, i.e. 21 years of insurance multiplied by 2%.

His seniority increment will increase as follows:

In January 2018, he will receive 2% for every full insurance year beyond the first 4 years, in other words, he will be entitled to an additional 8% increment and receive a maximum seniority increment of 50% of his basic pension (42%+8%=50%). Additional seniority increment will amount to 8% and not 10% since adding 8% will already let you reach the maximum rate of seniority increment allowed - 50%.

Example 2:

In 1970, a woman immigrated to Israel with her husband. This woman worked during 10 full years. She did not complete the qualifying period by retirement age. She receives an old-age pension as a housewife since reaching the age of entitlement to an old-age pension.

Her seniority increment will increase as follows:

As of January 2017, she will receive 2% for every full insurance year beyond the first 9 years she has accumulated. In other words, she will be entitled to a seniority increment of 2%.

As of January 2018, she will receive 2% for every full insurance year beyond the first 4 insurance years she has accumulated. In other words, she will be entitled to a seniority increment of 12% of her basic pension (2% for 6 years).

As of January 2019, she will receive a 2% increment for every insurance year accumulated. In other words, she will be entitled to a seniority increment of 20% of her basic pension (2% for 10 years).

For your convenience, here is a seniority increment calculator (Hebrew) to find out to which seniority increment rate you are entitled.

For purposes of determining eligibility to seniority increment, the following periods are taken into account:

For a man – all periods in which he was insured and an Israeli resident, whether or not he was working.

For a woman – the periods listed below:

  • Working period – all the periods in which she worked, regardless of her marital status.
  • Periods in which the woman was single or divorced – whether she worked or not during these periods.
  • Periods in which the woman was married, and her husband was either not covered by old-age insurance or was not an Israeli resident – whether she worked or not during these periods.
  • Periods in which the woman was a widow and did not receive a benefit to survivors or dependents with respect to her deceased husband - whether she worked or not during these periods.
  • Periods in which the woman was an Aguna – periods in which the woman was married and two years passed since her husband disappeared or went overseas without her consent and did not pay for her maintenance (alimony) for that time - whether she worked or not during these periods.
  • Periods in which the woman received a general disability pension – the period of the general disability pension is calculated from January 1, 1996, and onwards. These periods are taken into consideration only for women born after January 1, 1931 - whether or not they worked during them.

Please note:

  • Insurance periods are calculated until the old-age pension is received.
  • Those insurance periods in which the old-age pension was not paid for whatever reason, are also taken into consideration.
  • In any case, the seniority increment will not exceed 50% of the pension.
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