Who is eligible for a grant from the Israeli tax authorities for the tax year of 2011? (Part II)
How are eligibility and grant amount determined?
After submission of the claim at the post office, the Tax Authority will determine if you meet the eligibility requirements according to: Marital status (age + number of children), the number of properties owned by your family and more.
If you meet the eligibility requirements, amount for your grant will be calculated accordingly.
A word of warning:
Do not think for a moment that the information you provide is “taken for granted”. The tax authorities will have every piece of information checked and re-checked (cross-examination) with other financial information received from employers, National Insurance data, the annual report submitted to the IRS (if applicable) and more, so please be very careful and do not make mistakes.
The next step:
The Tax Authority will determine by the end of 90 days from the date of filing the claim or until 15 July 2012, (whichever is later), the eligibility for grant and the grant amount. Date of submission of the claim will be considered as the date it was first filed or after its entirety (including submission of additional documents if necessary). Be sure you have all the documents you need the first time you submit your claim.
The grant - is it final?
No it is not final and it could be changed or even canceled if the Tax Authority, at its own initiative or by your request, decides to correct its decision it can be done within three years from the date it was given (the first decision), if new facts were discovered or if a mistake was made in determining the grant.
What will the grant amount be?
The final amount of the grant you are eligible for is determined by yours and your partner’s income from work, business, any other income you may have, and the number of your children your age, etc. Here are some examples:
| The individual submitting a claim has one or two children at least or he is at the age of at least 55 years and over even without children | |
| The average of the total income | Monthly grant amount due in ₪ |
| 0 – 1,920 | 0 |
| 1,921 | 80 |
| 2,000 | 93 |
| 2,500 | 173 |
| 3,340 – 4,450 | 310 |
| 4,500 | 298 |
| 5,000 | 183 |
| 5,710 | 20 |
| 5,711 and over | 0 |
| The individual submitting a claim has more than three children | |
| The average of the total income | Monthly grant amount due in ₪ |
| 0 – 1,920 | 0 |
| 1,921 | 110 |
| 2,000 | 129 |
| 2,500 | 246 |
| 3,340 – 4,450 | 440 |
| 4,500 | 428 |
| 5,000 | 311 |
| 6,237 | 20 |
| 6,238 and over | 0 |
Note:
The amounts are correct for a person who has income from work or from a business and has no other income (not from salary or business) as defined by law therefore, if for example you receive rent from a property you own, the rent will be considered an amount from a different source.
If you do have an income and it is traceable be sure the tax authorities will know about it sooner or later.
If you were given (paid) a grant in an amount less than the grant you are eligible, you will be paid the missing amount, carrying linkage differentials and interest.
If you were given (paid) a grant for more than the amount of the grant you are eligible, you will be required to return the difference, within 90 days after you received the request for refund, plus indexation but no interest.
Can the grant be reduced?
If you or your spouse has any "extra income" from salary or a business or any other type of "extra income", the amount of the grant will be reduced according to the level of such income.
What will be considered an extra income?
Additional income is considered one of the following revenues:
Allowance is income under section 2 (5) Income Tax Ordinance (e.g., pension), except a pension paid to an employee because of disability, loss of working capacity or the death of spouse.
Work Injury Benefit or accident victims and paid by the NII.
(This is not a final list in my opinion)
How will the grant be paid?
If you are an employee or an independent with a monthly income (average) exceeding 1920 Shekels and submit your claim by 31 March 2012, you will receive the grant in four equal payments at these times: 15 July 2012, 15 October 2012, 15 January 2013, 15 April 2013.
If you submit the claim by 30 June 2012, you will receive the grant in three equal payments at these times: 15 October 2012, 15 January 2013, 15 April 2013.
If you submit the claim by 30 September 2012, you will receive the grant in two equal payments at these times: 15 January 2013, 15 April 2013.
If you are self-employed:
The amount for the grant will be deducted against the tax you owe for any income from any source in the tax year of 2011. The unused balance (if you don’t use it all) of the grant will be offset over the following three tax years (2012, 2013 and 2014).
If the balance of the grant could not be deducted in these four tax years, it will be paid in the fifth year with a 25% deduction of the balance.
How to appeal the determination of eligibility for a grant
You can submit an objection to the decision on determining eligibility. You must submit a reasoned objection to the assessing officer (at the tax authority office) nearest to you, within 30 days of the given statement.
If you disagree with a decision on the objection submitted, you can appeal to the Appellate Court in your area.
A word of wisdom:
It will be worthless if you have to pay the court’s fees and for a lawyer specializing in this field.
Conclusion:
Keep all your records, pay stubs, etc. up to date and when the time comes use the tools given to you here and the Tax Authorities site to determine if you are eligible for this grant.
This is the first time the State of Israel is giving this kind of grant and as we well know, politics could change the law in the future therefore use it as soon as you can and don`t abuse it.
Sincerely,
Tzvi Szajnbrum, Attorney at Law