In a move aimed at easing a long-standing financial burden on American Jews considering immigration to Israel, the Knesset approved on Wednesday a temporary exemption from Israeli National Insurance contributions for certain new immigrants from the United States.
Lawmakers passed Amendment No. 262 to the National Insurance Law, introduced by lawmaker Simcha Rothman. The measure grants new immigrants from the U.S. a five-year exemption from paying Israeli National Insurance contributions on income from employment or self-employment for which they are already paying U.S. Social Security taxes.
The reform seeks to address what supporters describe as a structural gap between the two countries’ systems. Israel and the United States do not have a totalization agreement to prevent double social security contributions. As a result, U.S. citizens who move to Israel have often been required to continue paying U.S. Social Security taxes while also being liable for Israeli National Insurance payments on the same income.
Attorney Eitan Asnafy, who wrote about the reform, said the double burden has been a significant deterrent for American families evaluating aliyah.
Nefesh B’Nefesh, an organization that assists North American Jews in immigrating to Israel and was among the initiative’s proponents, has said the lack of coordination between the two systems created a substantial financial obstacle for many prospective immigrants.
The exemption applies only to Israeli National Insurance contributions and does not cover health insurance payments, which remain mandatory. To prevent negative effects on eligibility for benefits that depend on National Insurance contributions, the amendment establishes that income earned during the five-year exemption period will be treated as if contributions had been paid.
At this stage, the measure applies solely to immigrants from the United States. Lawmakers cited the absence of a bilateral social security agreement, similar contribution rates in the two countries and the significant potential for U.S. aliyah as reasons for limiting the reform. The labor minister is authorized to extend the arrangement to immigrants from other countries in the future.
The amendment was enacted as a temporary provision for 10 years, with the option of two additional extensions of up to five years each.
The reform joins a series of recent steps designed to encourage immigration to Israel. These include a temporary income tax exemption for new immigrants relocating between 2026 and 2030, capped at 1 million shekels (about $320,000) per year, in addition to the existing 10-year exemption on foreign-source income.
Beginning in January 2026, however, the reporting exemption for new immigrants will be repealed, increasing the importance of advance tax planning for those considering relocation.
Supporters say removing the double social security burden could significantly improve the financial outlook for U.S. families contemplating aliyah. They caution, however, that prospective immigrants should conduct comprehensive cross-border tax and social security planning before making a final decision.