The National Insurance Institute collects insurance contributions from all residents in accordance with their income and insurance status, and pays benefits to those entitled. In this way, income is transferred from groups which are well off economically to weak and vulnerable groups, and the National Insurance Institutes thereby contributes to a more just distribution of the national income and to a reduction of poverty.
Since January 1, 1995, the National Insurance Institute is responsible for the collection of health insurance contributions under the National Health Insurance Law, and transfers these contributions collected to the various sick funds.
All Israeli residentA person whose life is centered in Israel. Criteria for determining this include: Israel is your permanent place of residence, where your family resides, where your children go to school, your primary place of work, or where you are studying. s aged 18 or older must, under law, be covered with the National Insurance Institute, and must pay insurance contributions (except for a married woman who does not work outside her household - as well as for a person who immigrated to Israel and became an Israeli resident for the first time when over age 62 who pays health insurance contributions only). The National Insurance Institute charges fines and linkage to those who do not pay insurance contributions on the date stipulated by law.
This section will be describe the different types of insured; types of benefits for which they are insured; income bases according to which insurance contributions are calculated and insurance contribution rates.
The proper payment of insurance contributions ensures eligibility for most National Insurance benefits. All Israeli residents aged 18 and older must, under law, be covered with the National Insurance Institute and pay insurance contributions (except for a married woman who is a housewife only and a person who immigrated to Israel and became a resident for the first time when over 62).
Payment of national and health insurance contributions is calculated in accordance with level of work and non-work income of the insured, and also in accordance with the status of the insured:
A salaried workerA self-employed workerUnemployed
All insured persons must be registered with one of the country’s health maintenance organizations (HMOs, known also as kupot holim) and may choose which HMO to join. The HMO must provide all insured persons with a standard Health basketA range of vital health services that a health maintenance organization (HMO, known in Israel as a “kupat holim”) must provide unconditionally to all its members.
as specified by law.
The amount of one's payment of national and health insurance contributions is calculated in accordance with the level of income that the insured person has from his workplace or from other sources, and in accordance with the determined for him:
Employers must report on their employees and must pay insurance contributions on their behalf. However, self-employed workers, students (including yeshiva students) and non-workers must pay their insurance contributions on their own. Following are the different methods of reporting and of paying insurance contributions:
Under the National Insurance Law, if a worker is employed by several employers or if a person receives early pension from several sources, the secondary employerThe employer through whom his worker declared, in form 101, that he earns an "additional salary. or pension payer deducts national and health insurance contributions from his income or pension at the full rate. In some cases, the amount of insurance contributions deducted is higher than that required by law.
In order to prevent over-deduction of insurance contributions, workers employed by several employers and persons receiving early pension from several sources should provide their secondary employer or pension payer with an authorization of the correct deduction rate.
A worker or early pension recipient from whose income or pension an amount has been deducted which is greater than the required one is entitled to a refund of insurance contributions.
The following may coordinate their insurance contributions: A person working for two employers or more An early pension recipient who also works as an employee for one employer or more A person receiving an early pension from two or more sources
On condition that they meet one of the following conditions: Their monthly income from their main employerThe employer through whom his worker declared, in form 101, that he earns his "monthly salary". or primary pension source is below 60% of the average wage, that is, below NIS 5,804 (as of Jan 01, 2017). Their total monthly income from all employers and/or pension sources is higher than the maximum income liable for the payment of insurance contributionsThe amount of maximum income on which insurance contributions are paid. Insurance contributions are not paid on any income that is above this maximum. The maximum is updated every year in accordance with the rate of the rise in the Consumer Price Index. : NIS 43,240 (as of Jan 01, 2014).
The money that the National Insurance Institute collects as insurance contributions are used to fund benefit payments to all insured. Therefore the NII must assure that all insurance contributions are paid on time.
Employers who do not pay the insurance contributions for their employees on time are charged a fine as well as linkage differentials under law. In addition, if an employee of such an employer is entitled to a benefit from the NII, the NII may sue the employer for the amount of the benefit.
Those who are self-employed or do not work who have accumulated a debt in insurance contributions are also charged fines and linkage differentials under law.
Most important,If you have accumulated an insurance contribution debt, it is important that you contact your NII local branch as soon as possible in order to settle your debt, so that it will not continue to increase.
You can request reduction of fines and linkage differentials and reach an arrangement to pay your debt in convenient installments.
If you have been residing abroad with your family for a lengthy period of time or if you have immigrated to another country and are in effect no longer an Israeli resident, you must notify the NII so that the possibility of the termination of your NII coverage can be looked into.
Under law one must report those employees who receive early pension payments. One must also pay national and health insurance contributions for them.
A failure to report or to pay the insurance contributions at the legal date will lead to debiting the pension payer's account with fines and indexation under law.
Employers - for whom a collection officer of the NII has determined, based on an investigation of deductions that was undertaken against them, what sum of insurance contributions they must pay - that do not concur with his determination, may appeal against it.
Until December 31, 2016, the appeal was submitted to the Tax Committee. As of January 1, 2017, Tax Committees were removed, and the appeal must be submitted to the Objections Officer.