The main source of financing NII benefits under the National Insurance Law is the national insurance contributions collected from all residents. In 2005 the NII covered 2,430,000 employees – employed by 201,000 employers – and 595,700 non-employed persons, of whom 310,600 were self-employed.
The NII is responsible for collecting national and health insurance contributions from employees through their employers, from self-employed workers, from non-employees and from people who do not work.
The rate of national insurance contributions varies in accordance with wages; low-wage earners, including mainly those who are not employed or are students, pay minimal insurance contributions. Employers and the government also participate in funding the national insurance system. An additional source of financing the system is interest on NII investments.
The NII collects health insurance contributions as well, and allocates the money collected among the various sick funds. Furthermore, it is responsible for the ongoing management of the file of all those insured in health insurance.
Total receipts for national insurance branches amounted to approximately NIS 49.7 billion. Of this sum, about 56% are from independent sources and 44% from the State budget.
National Insurance Receipts by Financing Source:
Public collection 45.80%, Interest on investments and others 10.20%, Funding of laws and agreements by the Ministry of Finance 17.40%, Budget from the Ministry of Finance by law (section 32) 23.50%, Section 32c [cost of labor 3.10%].