Prime Minister Benjamin Netanyahu and Finance Minister Israel Katz announced on Sunday the extension of unemployment benefits for Israelis who have lost their jobs or been placed on furlough due to the coronavirus outbreak until mid-August.
This decision guarantees continued financial support to some 250,00 Israelis whose compensations were set to expire at the beginning of July.
The decision also extends eligibility for grants to those aged 67 and over who are not expected to return to work. At the end of this period, further stipends will be re-examined according to the current unemployment rate.
Extending unemployment payments until mid-August is expected to cost a quarter of a billion shekels out of the state coffer, according to a preliminary calculation. This, in addition to another half a billion shekels after the government decided to not count days of lockdown as part of employees' furloughs.
Since the government started lifting restrictions on the economy in mid-April, 360 Israelis returned to work, however, 130,000 others were placed on unpaid leave instead - most of them from businesses that struggled to bounce back to full operations due to prolonged closures.
About 650,000 Israelis are currently on unpaid leave and another 200,000 have been laid off. In addition, tens of thousands of self-employed Israelis have not returned to work due to social distancing orders and some are even considering closing their businesses.
Finance Ministry officials opposed the move, saying it would be better to reinstate the unemployed rather than handing them unemployment payments.
"Our opposition doesn't stem from us being bad people, quite the opposite," said a senior ministry official. "Receiving unemployment benefits is less fair than bringing back employees to their workplaces. Employers even receive NIS 7,500 for every employee who is reinstated."