Unemployed working for a low-wage or starting a new independent business


Grant for unemployed person working for a low wage

Who is eligible for the grant?

An unemployed person who worked at a job with an average daily wage that is lower than the amount of unemployment benefit to which he or she would have otherwise been entitled, will be eligible to a grant, so long he or she worked for at least 25 days and the extent of their work was at least 50%. It is not necessary for work days to be consecutive during one month, or to be performed for a single employer.

The sum of the grant

The grant is the difference between the unemployment benefit that he or she would have been entitled to, had he or she not been working at a low-wage work, and half of the salary from the low-wage work.

For example:

The unemployed entitled to an unemployment benefit of NIS 6,000 per month (ILS 240 of unemployment benefit per day multiplied by 25 days), who started to work for a wage of NIS 4,000 (ILS 160 multiplied by 25), will stop receiving unemployment benefits and be entitled to a grant amounting to ILS 4,000 per month, based on the following calculation:

(240-160/2) X 24 = 4,000

That month, his total income from work and from the grant will amount to ILS 8,000

Maximum grant amount per day

The daily amount of the grant will not exceed the difference between the average daily wage used to calculate unemployment benefits, and the average daily wage of the low-wage work.

For example:

Average daily wage used to calculate unemployment benefit: NIS 405
Average daily wage of the low-wage work: NIS 160
The maximum grant amount per day will not be above NIS 245 (405-160=245)

Period of entitlement to the grant

The period of entitlement to the grant is determined in accordance with the balance of the maximum unemployment days of the unemployed person during the current unemployment year, and in any case, the grant is paid for 100 days at most.


If a person received unemployment benefits after 30 days have elapsed since the day he or she reported to the Employment Service and before they began to work at the low-wage job, these days will be deducted from the days for which the grant is due.

For example:

The maximum unemployment days designated to an unemployed person: 138
The unemployment days paid to an unemployed person in the last 11 months prior to the start of their work at a low-wage job: 80
The unemployment days paid to an unemployed person in the first 30 days of the unemployment year: 20
The number of eligibility days: 138-80+20=78.

It is recommended to begin work at the low-wage job immediately after reporting to the Employment Service, so that a person may be entitled to the full grant, or at least so that as few days as possible will be deducted.

Please note, 

the days for which the grant is paid are not considered as unemployment days, and are therefore not deducted from the balance of the maximum period of unemployment due. Therefore, if you have used your entitled days of grant, and unemployment days remain due to you, you will be able to revert reporting to the Employment Service and receive unemployment benefits for the balance of unemployment days up until the end of the period of unemployment, after deduction of incomes, if necessary.

Submitting a claim for the grant

A person may submit a claim at the National Insurance Institute local branch nearest to the place of residence, using the form grant for unemployed person working for a low wage.

 

The claim and required documents may also be submitted by means of the NII's website or by fax to the local National Insurance Institute branch. It is not essential to provide the original documents. However, the National Insurance Institute may ask one to present an original document if the photocopy or fax is illegible, or for any other reason, according to the discretion of the claims officer.

Maintaining the right to unemployment benefit for an unemployed person who opens a new business

An unemployed person who began receiving an unemployment benefit and decided to open a business before using up the maximum period of entitlement to the benefit remains entitled to the benefit if the business fails and closes within 24 months.

In order to be eligible for the unemployment benefit, the recipient must return to the Employment Service soon after the business closes.

For example:

Period of entitlement to unemployment rights: from 1/10/2017 to 30/09/2018
Date of creation of new business's file: 1/12/2017
Period of new business's activity: from 1/12/2017 to 31/10/2018
Maximum unemployment days: 138
Unemployment days paid until new business's registration: 50
Unemployment days balance: 88

Since the new business was opened during a period of unemployment, and its time of activity was less than 24 months, entitlement to unemployment benefits is maintained.

In order to utilize the right to unemployment benefits, one must revert to report to the Employment Service as of 1/11/2018 and take-up the 88 unemployment days left by 31/8/2019. After 31/8/2019 it is impossible to receive unemployment benefits for the days that were not utilized.