Incentive Pension to Encourage People with Disabilities to Join the Workforce (Right)

From All Rights (Kol-Zchut) (www.kolzchut.org.il)

הקדמה:

An incentive pension replaces a disability pension for someone who has begun to work and whose income is greater than the amount established according to the law.
The total amount of income from work (as an employee or self-employed) and the incentive pension will always be higher than the sum disability benefit (the income from working will not affect the basic benefit, but rather Supplements.
A recipient who stops working or whose income decreases within three years of beginning to work may decided to receive a disability pension again without having to be reexamined. After three years, one must Submitting a General Disability Pension Claim and re-check eligibility.
To calculate the pension amount based on the amount of income from work, you can use an online calculator or phone calculator: 02-6463555
For more information see, the National Insurance Institute website.
Clip from the National Insurance about the Laron Law

An incentive pension, as established in The Laron Law, replaces the disability pension for recipients who begin working.

  • The pension is paid automatically for those who receive a General Disability Pension for 12 consecutive months, and currently their income from work exceeds the amount specified by the law.
  • The total amount of income from work (as an employee or self-employed) and the incentive pension will always be higher than the sum disability benefit.
  • The income not from working (such as pension, supplements or property income) will not affect the basic benefit, but rather Supplements.

Who is Eligible?

  • Those who receive a Disability Pension and fulfill the following two requirements:
  1. Recipient of a disability pension for at least 12 consecutive months.
  2. One has started to working and his income (gross) from work is higher than the amount established by the law as explained below.
  • The pension amount is determined according to the severity of the medical impairment and the period of eligibility for a disability pension:
  • Those who meet the following descriptions will receive a pension equivalent to 60% of the average wage 5,678 NIS a month from 01.01.2016 (5,556 NIS in 2015, 5,453 NIS in 2014 and 5,297 NIS previously):
  1. Someone with a severe impairment (medical disability of at least 70% or medical disability of at least 40% due to mental or emotional impairments, according to Section 33 or 91 of the medical tests book)
  2. Someone with prolonged eligibility (pension eligibility for at least five years (60 months) during the seven years which preceded 01.08.2009)
  • In all other cases the pension will be equivalent to 45% of the average wage 4,259 NIS as of 01.01.2016 (4,167 NIS in 2015, 4,090 NIS in 2014).
Example:
  • Receives a disability pension for medical disability of 40% because of mental impairment under section 33.
  • Began working, and the gross income from working is 5,800 NIS a month in 2016 (over 60% of the average wage). Due to their income from work is now entitled to pension instead of the incentive disability pension.
Example:
  • Receives a disability pension for medical disability of 40% because of a physical disability, and received the benefit for less than five years before -01.08.2009.
  • Began working, and the gross income from working is 4,500 NIS a month in 2016 (over 45% of the average wage). Due to their income from work is now entitled to pension instead of the incentive disability pension.

Amount of the allowance according to the percentage of disability

Changes to other benefits

  • Dependent supplement - The supplement for a spouse and children (also known as a dependents’ increment) will be gradually reduced for cases when income from work exceeds 8,636 NIS (as of 01.01.2013).
  • Additional monthly pension (Kachan) - A year from the date on which the incentive pension was first received, the additional monthly pension will be gradually reduced over the course of four years as follows:
Period Percentage of additional monthly pension
First year 100%
Second year 75%
Third year 50%
Fourth year 25%
  • Related benefits such as municipal property tax (arnona) discount, discount on public transportation and rental assistance (for more information see Disability Pension and Related Benefits):
    • Anyone eligible to receive an additional monthly pension, and for three years after the additional monthly pension ends, is also eligible to receive full related benefits. At the end of seven years, the benefits will be given in proportion to the pension amount.
    • For those who are not eligible to receive an additional monthly pension, there will be no change to related benefit eligibility for the first three years. At the end of three years, the benefits will be given in proportion to the pension amount.

Stopping work or decreased income

In the first 36 months

  • Those who stop working within the first 36 months from when they stopped receiving their disability pension will automatically receive the disability pension again at the same rate as it was before they began working.
  • If their income decreases within the first 36 months of receiving the incentive pension such that they are again eligible for a disability pension, they will automatically receive the disability pension in accordance with their income.

After 36 months

  • Those who stop working after the first 36 months from when they stopped receiving their disability pension will be required to submit a disability pension claim again and their eligibility will be reexamined.
  • If after 36 months, their income decreased such that they are again eligible for a disability pension, they will be required to submit a disability pension claim again and their eligibility will be reexamined.

Contact information for inquiries

  • You may call the following number for all information related to The Laron Law and incentive pensions: 04-8812245 (Sunday-Thursday 8:00-17:00).
  • Voice-commanded calculator to calculate disability and incentive pensions: 02-6463555.

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