National Insurance Institute - Non-Work Related Income

Work Status

Sometimes a person changes his work status (for example, he may cease working as an employee and begin working as self-employed). Such a change has implications on the benefits he receives from the NII as well as on the rate of insurance contributions that he is obliged to pay to the NII. Types of changes in work status and benefits affected by the change vary from case to case.

Ceasing Work - Temporarily or Permanently

A person who ceases working and cannot return to the labor market may be eligible for NII benefits for limited periods as a substitute for his wages. There may be a number of reasons for ceasing work including:

• Injury
   
• Pregnancy, Birth and Adoption
   
• Retirement
   
• Living Abroad
   
• and others
   

Rates

Rates of insurance contributions for a person who has income and is neither an employee nor self-employed:

• For the share of the income that is up to 60% of the average wage NIS 4,757 (as of 01.01.2009):
  4.61% (as of 07.01.2002) national insurance
  + 7.00% (as of 01.01.1995) health insurance contributions
   
• For the share of the income that is over 60% of the average wage and up to the maximum income liable for insurance contributions:
  5.00% (as of 01.01.2006) national insurance
  + 5.00% (as of 01.01.2006) health insurance contributions
   

For example, if a person receives income of 10,000 NIS per month the premiums would be as follows:

National Insurance:
4.61% of 4757 NIS = 219.30 NIS
+ 7.00% of 5243 NIS (i.e., 10,000 - 4757) = 367.01 NIS
For a total of 586.31 NIS payable for National Insurance

Health Insurance:
5.00% of 4757 = 237.85 NIS
+ 5.00% of 5243 NIS = 262.15
For a total of 500.00 NIS payable for Health Insurance

If you need more information or clarification on any subject concerning the NII, please feel completely comfortable to contact me.
 

Sincerely,
 

Tzvi Szajnbrum, Attorney at Law