Israel Encourages Low-Wage Workers to Claim Unclaimed 'Work Grant'
Translated & summarized from Bizportal by baba
Israel's Tax Authority is encouraging low-income workers to claim an unclaimed 'work grant' (negative income tax). Eligible individuals include employed and self-employed parents aged 21+ and those 55+. Applications for 2025 are open until the end of 2027, and for 2024 until the end of 2026. The grant aims to supplement low wages, with maximums and specific income ranges determining eligibility.
The story in 6 lines · by baba
- Israel's Tax Authority urges low-income workers to claim unclaimed 'work grants'.
- The grant is for employed and self-employed individuals aged 21+ with children, or 55+.
- Applications for the 2025 tax year are due by the end of 2027.
- Eligibility is based on monthly average income, family status, and number of young children.
- Owning significant non-residential property can disqualify applicants.
- A supplementary grant of up to NIS 500 per child under three is available.
Israel's Tax Authority is urging low-income workers to apply for a 'work grant,' also known as negative income tax, as a significant portion of eligible individuals are not claiming the funds. The grant is designed for employed individuals and self-employed individuals aged 21 and over who are parents, and those aged 55 and over, regardless of parental status. For the 2025 tax year, the maximum grant amount reaches NIS 10,260, with an average of approximately NIS 4,000 annually.
Eligibility and application deadlines are crucial for claiming this benefit. Applications for the 2025 tax year can be submitted until the end of 2027, while applications for the 2024 tax year must be filed by the end of 2026. The Tax Authority has provided an online calculator to help determine eligibility based on gross monthly income, number of work months, marital status, and the number of children under three years old. The calculation divides annual income by work months to check if the average falls within the eligible range for the chosen category.
Specific income ranges determine eligibility for the grant in 2025. For example, parents aged 21 and over with one or two children need a monthly average income between NIS 2,450 and NIS 7,289. These ranges are adjusted for single parents and those with more children. Additionally, a supplementary grant of up to NIS 500 per child under three is available, with specific income thresholds for this bonus.
Certain conditions can disqualify individuals from receiving the grant. Owning more than 50% of a non-residential property, such as an investment apartment, land, or shop, can lead to ineligibility. Assets registered under a spouse's or dependent child's name are also considered. The grant is calculated based on gross income from employment or business, and months of reserve duty, paid vacation, sick leave, and maternity leave are counted as work months, while unemployment months are not.
Applications are typically processed within 90 days. While most applicants do not need to submit pay stubs or Form 106, these may be requested if an employer has not reported income to the Tax Authority. The Tax Authority emphasizes that the grant amount is finalized after application submission, taking into account spousal income and other income sources like pensions.