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Law for the Increase of the Rate of Participation in the Labour Force and the Reduction of Social Gaps (Work Grant), 5768-2007

חוק להגדלת שיעור ההשתתפות בכוח העבודה ולצמצום פערים חברתיים (מענק עבודה), תשס"ח-2007

Published: 2007-12-27Consolidated Hebrew text as of 2026-01-01 · Last amended 2024-03-20✓ Amendment status checked against the Knesset legislation record on 2026-09-29
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Unofficial English translation — for reference only. It may contain errors or omissions and cannot be relied on as a legal text. Only the Hebrew text published in Reshumot is legally binding.More

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Chapter III: Grant for a Self-Employed Person

Entitlement to Grant for a Self-Employed Person§

17.
(a)In this Chapter –

"self-employed person" – an individual who is a resident of Israel and who had income from a business or profession in the tax year;

"appreciation" – (Repealed).

(b)The provisions of Chapter II with respect to an employee shall also apply to a self-employed person who has children and who has reached the age of 21, and to a self-employed person without children who has reached the age of 55, all in the tax year in respect of which the grant is claimed, with the necessary modifications and the following modifications:
(1)(Repealed);
(2)a self-employed person as aforesaid shall be entitled to a grant under the provisions of this section if all of the following are met:
(a)the self-employed person submitted to the Director a claim for the grant, in the form prescribed by the Director, during the period from the end of the tax year in respect of which the grant is claimed until 30 November in the following tax year, and the Director may extend the period for submitting the claim under this sub-paragraph if he is of the opinion that it is just to do so in the circumstances of the matter, up to a time not later than two years from the end of the tax year in respect of which the grant is claimed;
(b)the self-employed person submitted in the following tax year a return or an online self-employed return, as the case may be, in accordance with the provisions of section 131 of the Ordinance and within the times referred to in sections 132 and 133 of the Ordinance;
(c)if the self-employed person also had employment income – every employer who paid him such income submitted to the Director an online employer's return, under the provisions of section 166 of the Ordinance, and if the employer was an individual who employed the self-employed person in his private household – the employer reported the self-employed person's income to the National Insurance Institute, all in accordance with the provisions of section 7(a)(2);
(3)where the Director has determined the right of a self-employed person to a grant as referred to in section 9, the provisions of section 12 shall apply with respect to the payment of the grant, with the necessary modifications.
(c)(Repealed).

Restrictions on Entitlement in respect of a Self-Employed Person§

17a.

Without derogating from the provisions of section 3, as applied by section 17(b), entitlement to a grant pursuant to section 17 shall not apply to a self-employed person in respect of whom one of the following applies:

(1)he was required to maintain books of account for the tax year in respect of which the grant is claimed and did not do so;
(2)his books of account for the tax year in respect of which the grant is claimed were determined to be inadmissible, in a determination that is not subject to appeal.

Regulations Concerning Grant for a Self-Employed Person§

18.

The Minister of Finance, with the approval of the Finance Committee of the Knesset, may make Regulations on any matter relating to the implementation of the provisions of this Chapter, including with respect to –

(1)methods of proof regarding the date of opening of a business, the commencement of engagement in a profession, or the cessation of engagement in a business or profession, all for the purposes of the definition of "average monthly income";
(2)(Repealed);
(3)(Repealed);
(4)provisions and required adjustments, including additional conditions for the application of the provisions of this Chapter, with regard to the manner of determining the income of those listed below and with regard to methods of proving it, including additional returns or additional information to be required in respect of each of the following:
(a)a self-employed person who is a partner in a partnership;
(b)a self-employed person who is a member of a kibbutz or a member of a cooperative association, to whose income calculation the provisions of sections 54 to 62 of the Ordinance apply, as the case may be;
(c)a self-employed person who is a member of a closely held company, within its meaning in section 64 of the Ordinance;
(d)a self-employed person who is the taxpayer in a family company; in this paragraph, "taxpayer" and "family company" – as defined in section 64a of the Ordinance;
(e)a self-employed person whose spouse's income derives from a source of income listed in section 66(d)(1) to (3) of the Ordinance;
(f)a self-employed person who works together with his spouse at a fixed place of business, as defined in section 66(e)(1) of the Ordinance;
(g)a self-employed person who is a controlling shareholder in a controlled foreign company; in this paragraph, "controlling shareholder" and "controlled foreign company" – as defined in section 75b of the Ordinance.

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Chapter III-A (Expired)(Repealed)

18a.§

(Repealed — הוראת שעה (מס' 2) תש"ף-2020, 2020)

18b.§

(Repealed — הוראת שעה תש"ף-2020, 2020)

18c.§

(Repealed — הוראת שעה תש"ף-2020, 2020)

18d.§

(Repealed — הוראת שעה תש"ף-2020, 2020)

18e.§

(Repealed — הוראת שעה תש"ף-2020, 2020)

18f.§

(Repealed — הוראת שעה תש"ף-2020, 2020)

18g.§

(Repealed — הוראת שעה תש"ף-2020, 2020)

18h.§

(Repealed — הוראת שעה תש"ף-2020, 2020)

18i.§

(Repealed — הוראת שעה תש"ף-2020, 2020)

18j.§

(Repealed — הוראת שעה תש"ף-2020, 2020)

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Chapter III-B: Assistance grant for the self-employed – second round, and assistance grant for an employee who is a controlling shareholder, during the period of coping with the coronavirus

Definitions – Chapter III-B§

18k.

In this Chapter –

"spouse" – as defined in the Real Property Taxation Law;

"average monthly income from a business" – the amount of taxable income from a business for the year 2018, and in respect of a self-employed person with a new business – the amount of taxable income from a business for the year 2019, divided by the number of months during which the self-employed person engaged in the business or profession in 2018 or 2019, as the case may be;

"taxable income" – income after the deductions permitted from it under any law and before the set-offs and exemptions permitted from it under any law, excluding capital gain;

"taxable income from a business" – taxable income under section 2(1) of the Ordinance that is income from personal exertion, including maternity benefits paid under Section C of Chapter III of the National Insurance Law and a pregnancy-preservation allowance paid under Section E of Chapter III of that Law, and including remuneration for days of reserve service paid under Chapter XII of the National Insurance Law;

"income from personal exertion" – as defined in the Ordinance, except for income listed in paragraphs (1) to (7) of the definition of "income from personal exertion" in the Ordinance;

"employment income" – employment income under section 2(2) of the Ordinance, including maternity benefits paid under Section C of Chapter III of the National Insurance Law and a pregnancy-preservation allowance paid under Section E of Chapter III of that Law, and including remuneration for days of reserve service paid under Chapter XII of the National Insurance Law;

"average monthly employment income" – the amount of employment income in 2018 paid by a closely held company to an employed controlling shareholder therein, and in respect of an employed controlling shareholder in a new closely held company – the amount of employment income as aforesaid in 2019, divided by the number of months during which the employed controlling shareholder worked in the company in 2018 or 2019, as the case may be;

"closely held company" – a company that is a resident of Israel and is a closely held company within its meaning in section 76 of the Ordinance, which engaged in a business or profession during the determining period, at least;

"new closely held company" – a closely held company in respect of which one of the following applies:

(1)it commenced engaging in a business or profession in 2019;
(2)it commenced engaging in a business or profession in 2018 and in that year the company did not pay employment income to an employed controlling shareholder therein;

"Real Property Taxation Law" – the Real Property Taxation Law (Appreciation and Acquisition), 5723-1963;

"Value Added Tax Law" – the Value Added Tax Law, 5736-1975;

"transaction turnover" – as defined in the definition of "transaction turnover of a dealer" in the Value Added Tax Law;

"the Director" – as defined in the Ordinance;

"deductions" – as defined in the definition of "income from a business or profession" in section 1;

"self-employed person" – an individual who is a resident of Israel and who engaged in a business or profession during the six months preceding the month of April 2020, at least;

"self-employed person with a new business" – a self-employed person in respect of whom one of the following applies:

(1)he commenced engaging in a business or profession in 2019;
(2)he commenced engaging in a business or profession in 2018 and in that year had losses under section 28(a) of the Ordinance;

"capital gain" – as defined in section 88 of the Ordinance, including appreciation within its meaning under section 6 of the Real Property Taxation Law;

"employed controlling shareholder", in a closely held company – an individual in respect of whom both of the following apply:

(1)during the determining period, at least, he was a controlling shareholder as defined in section 32(9)(a)(3) of the Ordinance in the closely held company, and held shares in the company;
(2)in each of the six months preceding the month of March 2020, at least, employment income was paid to him by the closely held company in which he is a controlling shareholder;

"resident of Israel" – as defined in the Ordinance, including an Israeli citizen as defined in section 3a of the Ordinance who is a resident of the Area as defined in that section;

"the determining period" – the period from the 2nd of Tishrei 5780 (1 October 2019) until the day of submission of the claim for the grant pursuant to section 18q.

Assistance Grant for a Self-Employed Person§

18l.

A self-employed person who in 2019 reached the age of 20 or older shall be entitled to a grant under the provisions of this Chapter, for the purpose of assistance during the period of coping with the Coronavirus (in this Chapter – an assistance grant for a self-employed person), if all of the following apply to him:

(1)his taxable income for the 2018 tax year, and in respect of a self-employed person with a new business – his taxable income for the 2019 tax year, does not exceed NIS 1,000,000; where the self-employed person and his spouse had taxable income that is not income from personal exertion, half of that taxable income shall be regarded, for the purposes of this paragraph, as the taxable income of each spouse;
(2)his average monthly income from a business exceeds NIS 714;
(3)his transaction turnover during the period from the 5th of Adar 5780 (1 March 2020) until the 8th of Tammuz 5780 (30 June 2020) is lower than his transaction turnover during the same period in 2019 (in this paragraph – the 2019 base turnover), by an amount exceeding 25% of the 2019 base turnover; in respect of a self-employed person who commenced engaging in a business or profession after the 24th of Adar I 5779 (1 March 2019), the 2019 base turnover shall be deemed to be his transaction turnover from the day of commencement of engagement as aforesaid until the 4th of Adar 5780 (29 February 2020), divided by the number of months of engagement as aforesaid and multiplied by 4;
(4)the restrictions prescribed in section 17a do not apply to him in the 2018 tax year, and in respect of a self-employed person with a new business – in the 2019 tax year, with the necessary modifications;
(5)he submitted, by the time of submission of the claim for the grant pursuant to section 18q, a return under section 131 of the Ordinance for the 2018 tax year, and in respect of a self-employed person with a new business – he submitted such a return for the 2019 tax year, all where he was required to submit such a return for the said tax years, as the case may be, in accordance with the provisions of the Ordinance;
(6)he submitted a periodic return under sections 67 or 67a, as the case may be, of the Value Added Tax Law, for the reporting periods listed in paragraph (3), or a declaration under regulation 15 of the Value Added Tax Regulations (Registration), 5736-1976, for 2020 (in this paragraph – an exempt dealer's declaration), as the case may be, where he was required to submit them under the Value Added Tax Law; an exempt dealer's declaration shall be accompanied by a declaration regarding the fulfilment of the condition referred to in paragraph (3).

Assistance Grant for an Employed Controlling Shareholder in a Closely Held Company§

18m.

An employed controlling shareholder who in 2019 reached the age of 20 or older shall be entitled to a grant under the provisions of this Chapter, for the purpose of assistance during the period of coping with the Coronavirus (in this Chapter – an assistance grant for an employed controlling shareholder), if all of the following apply to him:

(1)the amount of his taxable income for the 2018 tax year together with the portion of the taxable income of the closely held company in which he is a controlling shareholder in that year, equal to his proportionate share, directly or indirectly, in entitlement to profits in the company (in this section – taxable income for an employed controlling shareholder), and in respect of an employed controlling shareholder in a new closely held company – the taxable income of the employed controlling shareholder for the 2019 tax year, does not exceed NIS 1,000,000; where the employed controlling shareholder and his spouse had taxable income that is not income from personal exertion, half of that taxable income shall be regarded, for the purposes of this paragraph, as the taxable income of each spouse;
(2)his average monthly employment income exceeds NIS 714;
(3)the transaction turnover of the closely held company in which he is a controlling shareholder, during the period from the 5th of Adar 5780 (1 March 2020) until the 8th of Tammuz 5780 (30 June 2020), is lower than its transaction turnover during the same period in 2019 (in this paragraph – the 2019 base turnover), by an amount exceeding 25% of the 2019 base turnover; in respect of a company that commenced engaging in a business or profession after the 24th of Adar I 5779 (1 March 2019), the 2019 base turnover shall be deemed to be its transaction turnover from the day of commencement of engagement as aforesaid until the 4th of Adar 5780 (29 February 2020), divided by the number of months of engagement as aforesaid and multiplied by 4;
(4)the restrictions prescribed in section 17a do not apply to the closely held company in which the employed person is a controlling shareholder, in the 2018 tax year, and in respect of a new closely held company – in the 2019 tax year, with the necessary modifications;
(5)the closely held company and the employed controlling shareholder therein submitted, by the time of submission of the claim for the grant pursuant to section 18q, a return under section 131 of the Ordinance for the 2018 tax year, and in respect of a new closely held company – submitted such a return for the 2019 tax year, in accordance with the provisions of the Ordinance;
(6)the closely held company in which the employed person is a controlling shareholder submitted a periodic return under sections 67 or 67a, as the case may be, of the Value Added Tax Law, for the reporting periods listed in paragraph (3);
(7)
(a)according to the monthly report submitted to the National Insurance Institute, he was a controlling shareholder in a particular company within the meaning of section 6b of the National Insurance Law, during the period from the 2nd of Tishrei 5780 (1 October 2019) until the 4th of Adar 5780 (29 February 2020), at least, and he is not entitled to unemployment benefits or to an advance on account of unemployment benefits as aforesaid, in respect of his income as a controlling shareholder in that company, for the period from the 2nd of Tishrei 5780 (1 October 2019) until the 6th of Iyyar 5780 (30 April 2020), solely by reason of the provisions of section 6b of the National Insurance Law;
(b)the Director may request from the National Insurance Institute information for the purpose of examining whether the condition referred to in sub-paragraph (a) is met; a person who has received information pursuant to this section shall not use the information except for the purpose of examining whether the said condition is met; the information shall be deleted upon the expiry of the need for it.

Amount of Grant for a Self-Employed Person§

18n.

An assistance grant for a self-employed person shall be in an amount equal to the product of 0.7 multiplied by the amount of his average monthly income from a business, but shall not exceed NIS 10,500; however, in respect of a self-employed person whose average monthly income from a business exceeds NIS 40,000, the said amount shall be reduced by an amount equal to the product of 0.173 multiplied by the amount by which his average monthly income from a business exceeds NIS 40,000.

Supplement for a Small Business§

18o.
(a)A self-employed person whose average monthly transaction turnover exceeds NIS 1,500 and does not exceed NIS 25,000, and in respect of whom the conditions set out below are met, shall be entitled to a supplement in the amount referred to in subsection (b) (in this Chapter – supplement for a small business, or supplement):
(1)his transaction turnover in the months of March and April of 2020 is lower than his transaction turnover in those same months of 2019 (in this paragraph – the base turnover in 2019) by an amount exceeding 25% of the base turnover in 2019; for the purpose of a self-employed person who began to engage in a business or profession after the 24th of Adar I 5779 (1 March 2019), the base turnover in 2019 shall be deemed to be his transaction turnover from the date of commencement of engagement as aforesaid until the 4th of Adar 5780 (29 February 2020), divided by the number of months of engagement as aforesaid and multiplied by 2;
(2)he submitted a periodic report under sections 67 or 67a, as the case may be, of the Value Added Tax Law, for the reporting periods listed in paragraph (1), or a declaration under regulation 5 of the Value Added Tax Regulations (Registration), 5736-1976, for the year 2020 (in this paragraph – exempt dealer declaration), as the case may be, if he was required to submit them under the Value Added Tax Law; the exempt dealer declaration shall be accompanied by a declaration regarding the fulfilment of the condition referred to in paragraph (1).
(b)The amount of the supplement for a small business under subsection (a) shall be as set out below, as the case may be:
(1)in respect of a self-employed person whose average monthly transaction turnover exceeds NIS 1,500 but does not exceed NIS 8,333 – NIS 700;
(2)in respect of a self-employed person whose average monthly transaction turnover exceeds NIS 8,333 but does not exceed NIS 16,667 – NIS 1,875;
(3)in respect of a self-employed person whose average monthly transaction turnover exceeds NIS 16,667 but does not exceed NIS 25,000 – NIS 3,025.
(c)In this section, "average monthly transaction turnover" – transaction turnover for the year 2019, divided by the number of months of activity.
(d)The conditions prescribed in section 18l shall not apply to entitlement to the supplement for a small business.
(e)A self-employed person shall not be entitled to the supplement for a small business if the restrictions referred to in section 17a apply to him in the tax year 2019, with the necessary modifications.

Amount of Grant for an Employed Controlling Shareholder§

18p.
(a)The assistance grant for an employed controlling shareholder shall be in an amount equal to the product of 0.7 multiplied by the amount of the average monthly employment income of the employed controlling shareholder (in this section – average monthly employment income); however, in respect of an employed controlling shareholder whose average monthly employment income exceeds NIS 40,000, the amount referred to shall be reduced by an amount equal to the product of 0.173 multiplied by the amount by which his average monthly employment income exceeds NIS 40,000.
(b)Notwithstanding the provisions of subsection (a), the assistance grant for an employed controlling shareholder shall not exceed the lower of the following:
(1)NIS 10,500;
(2)the amount of the grant to which the employed person would have been entitled under section 18n had his average monthly employment income, which accrued to him in 2018 or 2019, as the case may be, from one or more close companies in which he was a controlling shareholder, been regarded as the average monthly income from a business that accrued to him in that same period, with the necessary modifications.

Claim for a Grant or Supplement§

18q.
(a)A self-employed person or an employed controlling shareholder shall submit to the Director, within 97 days of the 9th of Iyyar 5780 (3 May 2020), a claim for an assistance grant for a self-employed person, for a supplement for a small business, or for an assistance grant for an employed controlling shareholder, as the case may be.
(b)A claim under this section shall be submitted in an online form prescribed by the Director and shall include the particulars required for the purpose of examining whether the self-employed person or the employed controlling shareholder, as the case may be, meets the conditions for receiving the grant or the supplement and for the purpose of paying the grant or the supplement in accordance with the provisions of this Chapter.

Determination of Entitlement to a Grant or Supplement§

18r.
(a)Where a self-employed person or an employed controlling shareholder has submitted to the Director a claim under section 18q, the Director shall determine, as soon as possible and no later than the end of 5 days from the date of submission of the claim, the entitlement of the self-employed person or of the employed controlling shareholder to the grant or to the supplement, and the amounts thereof.
(b)The Director may, on his own initiative or at the request of the self-employed person or the employed controlling shareholder, correct his determination as referred to in this section, if new facts have come to light or if he finds that an error occurred in that determination.

Payment of the Grant or Supplement§

18s.

Where the entitlement of a self-employed person or of an employed controlling shareholder to an assistance grant for a self-employed person, to a supplement for a small business, or to an assistance grant for an employed controlling shareholder has been determined, the grant or the supplement as aforesaid shall be paid as soon as possible and no later than the end of 5 days from the date of the determination of entitlement as referred to in section 18r, through the Israel Tax Authority, or through another government ministry if the consent of the Director, of the Minister in charge of that government ministry and of the Director-General of that ministry has been given, by crediting the bank account of the self-employed person or the employed controlling shareholder whose details were in the possession of the Director or of the government ministry, as the case may be, and were confirmed by the self-employed person or the employed controlling shareholder.

Objection and Appeal§

18t.

Sections 10 and 11 shall apply, with the necessary modifications, in respect of an assistance grant for a self-employed person, supplements for a small business, or an assistance grant for an employed controlling shareholder.

Overpayment§

18u.

Section 13 shall apply, with the necessary modifications, in respect of an assistance grant for a self-employed person, a supplement for a small business, or an assistance grant for an employed controlling shareholder.

Underpayment§

18v.

Section 14 shall apply, with the necessary modifications, in respect of an assistance grant for a self-employed person, a supplement for a small business, or an assistance grant for an employed controlling shareholder.

Status of Grant or Supplement§

18w.
(a)Notwithstanding the provisions of any law, an assistance grant for a self-employed person, a supplement for a small business, or an assistance grant for an employed controlling shareholder shall not be regarded as income for the purposes of the enactments referred to in section 16(a), except for the purposes of the Ordinance.
(b)An assistance grant for a self-employed person, a supplement for a small business, or an assistance grant for an employed controlling shareholder shall not be regarded as part of the price of the transactions of a dealer under section 12 of the Value Added Tax Law.
(c)Section 16(b) shall apply, with the necessary modifications, in respect of an assistance grant for a self-employed person, a supplement for a small business, or an assistance grant for an employed controlling shareholder.

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