Source of Financing

The main source of financing of benefits paid under the National Insurance Law is the national insurance contributions collected from Israel’s citizens. In 2007 there were 2,540,000 employees covered in national insurance, and they were employed by 220,700 employers and 334,900 self-employed persons.

The National Insurance Institute is responsible for collecting national and health insurance contributions from employees by means of their employers, from self-employed workers, from non-employees and from non-workers.  The insurance contribution rates vary in accordance with the wage level – low wage earners pay a lower rate than do higher wage earners. The employers and the government also participate in financing the national insurance system. In addition, the NII has independent income from interest on investments.

The National Insurance Institute collects health insurance contributions and is responsible for distributing the money collected among the sick funds, as well as for the ongoing management of the file of persons covered in health insurance. Total collection for the national insurance branches amounts to approximately NIS 54.7 billion. About 54.7% of this amount is from independent sources, and about 45.3% – from the State budget.