A pension in Israel, like in any other country, is an old-age benefit paid in the form of an annuity (regular monthly payment), designed to partially compensate a person for income lost after retirement and maintain an adequate standard of living. The main type of pension in the country is insurance and is paid in the amount accumulated over the period of employment. Old-age payments are provided even for immigrants who have no work experience due to their advanced age.
General information about the life of retirees in Israel
How retirees live in Israel largely depends on their well-being. If they managed to move to the country long before old age and earn a decent pension, a well-deserved rest is guaranteed.
It is more difficult for repatriates who settled in Israel after retirement: government payments hardly cover basic expenses, so most retirees, in order to earn a living in Israel, in the absence of other passive income, are forced to earn extra money in low-skilled and low-paid jobs.
At the same time, the quality and standard of living in the country is very high in comparison with the CIS countries: the average life expectancy is 82.4 years (80.7 years for men and 84.2 years for women). The state is trying in every possible way to stimulate the activity of the elderly, providing extensive benefits to pensioners in Israel, including:
- travel on buses, light rail transport and trains (50%);
- visiting museums, cinemas, theaters and other public institutions;
- municipal discount on real estate tax;
- payment for electricity, apartment rent, assistance in obtaining social housing, partial payment for health insurance (with a low pension).
Labor pension in Israel
The Israeli pension system assumes three main types of pension payments for residents of the country:
- directly the old-age pension (פנסיית זקנה);
- disability pension (פנסיית נכות), the amount of which depends on the degree of a person's disability;
- survivor's pension (פנסיית שאירים), which is paid to the surviving children and the spouse in the amount accumulated by the deceased relative.
The most common pension provision in Israel is, by far, the old-age pension. Anyone who has made contributions to old or new pension funds (קרן פנסיה), insurance funds of managers (ביטוח מנהלים) or reserve funds (קופות גמל) have the right to receive it.
Since 2008, in accordance with the Order "On the extension of the term of comprehensive pension insurance in the economy", pension insurance has become compulsory for all employees who have reached the age of 20. The total contribution is 18.5% of the salary, where 6% is the employee's contribution and 12.5% is the employer's contribution.
The employee himself has the right to choose how the pension is calculated in Israel, in what type of pension insurance and the specific fund his savings should be kept. Upon reaching the retirement age, the pensioner will receive the pension that he was able to accumulate during his labor activity. If its size is low, he will be able to qualify for an additional payment.
Retirement age in Israel
Since the introduction of the Law "חוק גיל פרישה" in 2004, the age of retirement in Israel has been legally fixed for the first time. Prior to this, there was no single age qualification, and it was mainly regulated by collective agreements with the employer.
Initially, the law defined the retirement age at 60 for women and 65 for men. But due to the increase in life expectancy at the beginning of 2021, this age limit is gradually increasing.
At the time of writing, the retirement age in Israel for women and men is 62 and 67, respectively. Please note that it is planned to increase the qualification for the female population in the coming years to 64 years, but this decision has not yet been implemented.
In addition to the differentiated qualification, Israel has a mandatory retirement age of 67 years. Upon reaching this age, the employer has the right to terminate the employment relationship with the employee.
Depends on the pre-retirement age in Israel and how many years a person can continue to work, on some other factors:
- first, the collective agreement with the employer may allow for a longer period of employment;
- secondly, a special period of work may be determined by law in relation to certain professions: for example, for judges it is 70 years and 75 years for assistant judges;
- thirdly, a special period of retirement in Israel can be set for certain categories of the population: for example, for spouses and parents of persons who died in military service, the mandatory retirement age is raised to 72 years, for persons whose children died independently from the reason, the mandatory retirement age (RO) rises to 71 years.
In the same way, the retirement age can be reduced, in any case, such programs are offered by some budget pension funds. The minimum retirement age is 60 years.
It should also be noted that PV in Israel for retired repatriates does not differ at all from the standard retirement age of ordinary "vatikas" living in the country since birth or at least more than 15 years.
Minimum work experience for retirement
As such, seniority does not directly affect the amount of the pension received - what is important is the period of contributions to the pension fund, which the employer will make from the salary. The minimum threshold for pension fund membership is 10 years. The size of the pension will be directly determined by the duration of membership in the Pension Fund: the larger it is, the greater the amount of accumulated contributions will be, therefore, the higher the pension.
Average pensioners in Israel with a minimum wage are able to accumulate about 1 million shekels in 30-40 years of work, which allows them to expect to receive a minimum pension for 15-20 years. On average, a 20% increase in contributions will allow them to receive a monthly increase in their pension in the amount of 1,000 shekels. Consequently, the longer the insurance period, the higher the pension will be in the end.
Pension size in Israel
The state does not publish statistics on pensions and their average size. According to the latest relevant data from private research that we managed to find, the average pension in Israel is about 5.3 thousand.At the same time, there are serious gender disparities - women's pensions are more than half lower than men's: 6.8 thousand shekels for men versus 3, 8 thousand shekels for women. This is due, firstly, to a lower level of wages, and, secondly, to a shorter length of service of the insured labor activity (until recently, the retirement age for women was 60 years).
The average pension in Israel in dollars at the current rate at the time of publication is about $ 1.44 thousand, which is a relatively high figure. At the same time, Israeli pensions are characterized by a relatively high replacement rate for labor income: only 30% of pensioners receive less than 50% of their salaries. For most, the replacement rate is 50-70% and even higher.
There is no such thing as a minimum pension in Israel.There is a basic pension rate of NIS 1,554 for a single pensioner and NIS 2,355 for a couple if the spouse is not eligible for a labor pension (individual pension + spouse's supplement).
For seniors over the age of 80, the basic rate is NIS 1,641. There are also allowances for minor children (492 shekels each).
Ultimately, how much the pension is paid will depend on the insured length of service:
- until 2021, 2% was added to the base rate for each full insurance year exceeding 10 years of experience;
- from 2021, 2% were added to the base rate for each full insurance year exceeding 4 years of experience;
- from 2021, 2% will be added to the base rate for each insured year of service, starting from the first year of insurance.
The size of the pension in Israel for new immigrants will be calculated using a similar formula. In parallel, they will also be able to receive a spouse allowance, for minor children, and even a pension deferral benefit in the form of a 5% allowance for each year of a deferral in retirement.
Please note that the gain in seniority in any case cannot exceed 50%. A special calculator will help to calculate the percentage of increase in seniority.
Pay attention to what is the pension in Israel in rubles. Thus, the size of the basic pension rate at the current exchange rate is 28.4 thousand rubles. Taking into account the above indicators of the average pension, when converted into rubles, it will amount to 96.8 thousand. The payment of the pension is lifelong and is provided to everyone who has the status of a resident of Israel (with actual residence in Israeli territory), regardless of citizenship.
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Supplementary pension benefit
Anyone whose old-age pension is below the subsistence level, in the absence of other income, is entitled to receive an old-age benefit with a supplement from the National Insurance Institute (תוספת השלמת הכנסה לקצבת אזרח ותיק). The basic amount of such an allowance with a supplement from the state for a single pensioner not older than 70 years is 3,228 shekels and 5,102 for a married couple.
The maximum amount of an allowance with an additional payment for a couple living with two minor children is 7 thousand. You can find out more about the current amounts of an additional pension and their age differentiation here.
Conditions for receiving a pension with a supplement
To receive a pension with a supplement, Israeli law imposes a number of requirements on pensioners, in particular:
- the total income of a pensioner (including from sources other than pension) must not exceed 3,228 shekels for a single pensioner under 70 and 5,102 shekels for a couple;
- the pensioner is a permanent resident or citizen of Israel, while staying abroad, the pension cannot be paid for longer than 72 days;
- the pensioner is not a member of a kibbutz or cooperative moshav;
- the pensioner does not own a vehicle, the cost of which exceeds 41 thousand shekels;
- a person has no other social benefits other than a pension.
You can find out more about the conditions for receiving the premium here.
Where to go to receive a pension with a supplement
As in the case of registration of a pension and a supplement, an application for the appointment of a pension in an approved form is submitted to the nearest branch of the National Insurance Institute. The application can be submitted by personal visit, by mail, fax, in electronic format or in any other accessible way. Learn more about how to apply here.
You can apply for an allowance immediately when you apply for a labor pension or later, after the income of a pensioner or family is below the above-mentioned indicators.
Please note that pension supplements in Israel for emigrants from Russia are also required if they are permanent residents.
Duration of payment of allowance with a supplement
The payment of the allowance, subject to the above conditions, is assigned from the month when the pensioner submitted a corresponding application to the Insurance Institute. The law does not provide for specific terms for the payment of maintenance. It will be paid as long as the applicant is eligible to receive it, that is, until the amount of his total income in addition to the surcharge rises above the specified indicators.
The Insurance Institute monitors the official income of the recipients of the supplement, therefore, in the event of an increase in income, it will be canceled.
Deductions from pension with supplement
Regardless of what kind of pension emigrants from Russia receive in Israel, including if it is a pension with a supplement, a certain list of deductions can be made from it. These include:
- health insurance premiums of NIS 103 per month;
- tax, insurance, credit and other debts for the past;
- alimony and other periodic payments;
- income and other taxes for which the pension fund acts as a tax agent.
Find out more about royalties here.
Special old age allowance
Separately, it should be considered what a pension is for new immigrants in Israel. Persons who immigrate to the country for the first time already at an advanced age are eligible to apply for an old-age benefit for immigrants (גמלת זיקנה מיוחדת לעולים). It is paid in the same basic amount as the old-age pension for Israelis (NIS 1,535 for those under 80), but without a one-time bonus for seniority and deductions.
Consider the reasons for receiving a special old age benefit in Israel:
- lack of pension insurance due to failure to work and, accordingly, old-age pension (including for a spouse);
- immigration to Israel over the age of 60 (for those born before June 1944) and 62 (for those born in May 1947 and later);
- having the status of a permanent resident of Israel;
- reaching retirement age;
- lack of income that exceeds the maximum amounts.
An application for a pension for immigrants is submitted in the prescribed form to the National Insurance Institute.
Repatriation to Israel
Please note that repatriation to Israel may be grounds for moving, including at retirement age. The right to it is given to every Jew in accordance with the Law "On Return" No. 5710-1950 of 07/06/1950 (חוק השבות).
For the purposes of applying the law on repatriation, Jews who have been granted the right to return are recognized only:
- Halachic Jews, that is, those who were born of a Jewish mother;
- those who underwent conversion (the rite of conversion of the "goy" to Judaism) and abandoned their previous religion or did not belong to any confession.
At the same time, even for those who have reached the retirement age, the pension of the Russian Federation can be preserved upon repatriation.
To simplify the process of returning, the Ministry of Aliyah and Integration has been created in the country, and in most of the countries there are branches of the Jewish Agency (Sokhnut), where you can get all the necessary advice and assistance in moving.
In addition, retired repatriates will be able to qualify for discounts for:
- payment for television;
- renting real estate and paying land tax;
- using public transport;
- purchasing drugs from the social basket.
Details about the benefits and benefits provided for repatriates are described in the article: “What benefits and benefits can repatriates in Israel expect in 2021”.
Pensions for repatriates
There is no special program for immigrant retirees in Israel. If they managed to move to Israel long before reaching retirement age, they will be able to earn an insurance experience and receive a pension under the same conditions as the native Israelis.
In case of moving in pre-retirement or retirement age, repatriates can apply for a special old-age allowance for immigrants, as well as for an additional payment up to the subsistence level, in total not exceeding 3,228 shekels.
In addition to the direct retirement benefit, repatriated pensioners have the right to receive:
- heating season allowance in the amount of NIS 562 annually;
- supplement for rental housing in the amount of 500 shekels per month;
- a supplement for victims of the Holocaust in the amount of 3.6 thousand shekels;
- disability surcharge.
In addition, the current agreement between Russia and Israel on the payment of pensions allows Russian repatriates who have moved to Israel under the law of return to keep their Russian pension in full.
How to apply for a Russian pension in Israel
To be eligible for a Russian pension, repatriates from Russia must:
- reach retirement age in accordance with Russian law;
- have sufficient insurance experience to assign payments;
- retain Russian citizenship (this is not necessary, but it will greatly simplify the possibility of receiving a pension).
There are two ways to apply for a Russian pension in Israel:
- independently submit an application for registration of a pension to the branch of the Pension Fund of the Russian Federation at the place of residence before leaving;
- submit an application through your proxy representative.
Based on the requirements of the Decree of the Government of the Russian Federation N 1386 of 17.12. 2021, there is no opportunity to apply for a pension directly on the territory of Israel. It is important to take into account that payments can be made exclusively on the territory of the Russian Federation (for example, to the same representative) or only to an account opened in one of the Russian banks.
The pension must be reassigned annually, subject to confirmation of the fact that the recipient is alive. This can be confirmed with the help of an act drawn up directly at the FIU on the territory of the Russian Federation or in one of the diplomatic missions on the territory of Israel. Such an act is sent to the FIU every 12 months from the date of reassignment of the pension.
As for what kind of pension is paid to Russian pensioners in Israel, Art. 6 of the Russian-Israeli agreement obliges the Russian side to pay citizens their pension in full, in accordance with their pension savings earned during their residence in the Russian Federation.
The material about the peculiarities of pension payments to citizens of the Russian Federation living abroad is presented in the article: "Pensions for Russians living abroad: what you should know about in 2021".
Conclusion
The Israeli pension system is built on the principles of social justice. The right to a decent pension is received by everyone who has been insured during the period of employment and for whom the employer has made pension contributions. At the same time, the size of the salary when assigning a pension is of secondary importance, the main thing is the insurance experience. If it is not enough to receive a decent pension, the state will prescribe an additional payment up to the subsistence level.
Special pensions, including those with supplements, are also due to immigrant retirees who moved to Israel at an old age and did not have time to earn sufficient insurance experience.
