Summary of Coverage and Goal

Coverage

The workers’ accident compensation system in Israel is controlled and managed by the National Insurance Institute and is based on the National Insurance Law, Consolidated version (1995-5755), Chapter 5, “Employment Injuries Insurance”.

Insured persons and conditions of insurance

The workers’ accident compensation system is applied compulsorily to all employers to insure their employees (except for policemen, jailers and defence employees)—those regularly or temporarily employed, for daily or monthly wages, full time or part time, including: self-employed persons, vocational trainees, foreign residents employed in Israel, working prisoners, persons undergoing vocational rehabilitation, Israeli residents working abroad for an Israeli employer (under certain conditions), and persons whose salary is determined by law (such as Knesset members, judges, mayors), regardless of the age or nationality of the workers.

Hazards covered

This law grants benefits in order to protect the workers promptly and fairly against work-related accidents, occupational disease, disability or death.

If an insured person dies as a result of an employment injury (work accident or occupational disease), his or her relatives—widow/widower, orphans, parents and any other relatives (hereinafter called dependants)—under special conditions are entitled to employment injury benefits.

The term employment injury is applied to injuries, disabilities or deaths resulting from employment. The term work accident means an accident “which occurred in the course and as a consequence of the work and/or on behalf of the worker’s employer”. The definition in the case of a self-employed person is different and is “in the course and in consequence of the pursuit of his occupation”.

The insurance applies also to an accident that occurred to the insured person while driving, riding or walking to the workplace from home, or from the place he or she stayed overnight, or from work to home, or from one workplace to another, even if the harm caused to the employee occurred because of road hazards, so long as the demands or needs of the employee’s work constitute the main reason for the employee’s presence at the scene of the accident.

The insurance also applies to occupational diseases, defined in article 2 of Employment Injuries Insurance.

Occupational disease is defined as a disease contracted as a consequence of work or while acting on behalf of the employers, or, in the case of a self-employed person, in consequence of the pursuit of his or her occupation.

The occupational diseases are specified in a list recognized by the Institute and published in the Bylaws (regulations).

The list includes those diseases caused by injury resulting from employment and diseases caused by physical, chemical or biological agents or specific forms of work performance, and those apparently caused by work.

All employees are covered by the insurance, without exception. Every employer must insure his or her workers under each category.

Insurance coverage is mandatory also on the Government as employer, and includes all public employers.

Eligibility

Who is eligible

• An insured person who suffers a work injury (work accident or occupational disease) is entitled to injury allowance.

• An insured person who becomes an invalid as a result of a work injury is eligible for a pension or grant.

• An insured person with a 10 per cent or higher medical disability is eligible for vocational rehabilitation. For the way the extent of the disability is determined, see below.

Conditions of entitlement for work injury benefits

Injury allowance is granted to the insured person who was injured at work or became ill with occupational disease and as a result is unable to do either the original job or any other suitable work, and did not work in fact.

Work Invalidity Benefits Grant or Pension (hereinafter called disability benefits) are paid as long as the disability has been recognized as being due to a work accident and the insured person remains disabled as a result of the injury.

The results of the injury are evaluated by comparing the fitness of the person injured at work with the fitness of a healthy person of the same age and sex. The tests determining degree of disability are a combination of the fixed percentages for each injury, taking subjective consideration into account; the loss of a particular limb is of greater weight in certain professions.

The degree of disability is determined by medical boards, of which there are two categories:

• boards of the first instance

• appeal boards.

The boards first determine the causal connection between the work accident (injury or occupational disease) that had to be recognized for disability purposes and the degree of the causal connection. The medical boards are independent of the body that confronts them. The medical boards are quasi-legal bodies and give rulings rather than implementing administrative action. Being quasi-legal bodies, the medical boards are subject to the control of the labour courts.

Dependants’ benefits (pensions or grants)

To be entitled to dependants’ pension, a widow must be 40 years old or over, or have a child living with her, or be unable to support herself; a widower must have a child living with him. Definition of child: Child of the insured person up to the age of 18, and up to the age of 22 in certain cases.

Vocational rehabilitation

To be entitled to vocational rehabilitation, the insured person, due to work injury, must be unable to perform the previous work or job, or any other suitable work, and be in need of and suited for vocational rehabilitation.

Insurance contributions by the self-employed

Arrears in insurance contributions rule out eligibility or reduce the rate of monetary benefits. A self-employed person not registered as such in the National Insurance Institute at the time of the injury is not eligible for benefits.

Types of benefits (payments)

The insured person is entitled to two main types of benefits under the National Insurance Law in the event of work injuries or disease:

Benefits in kind

Benefits in kind include medical attention, convalescence facilities, and medical and vocational rehabilitation.

Medical attention includes hospitalization, medications and supply, repair and replacement of orthopaedic and therapeutic appliances. The medical attention in general is provided to the extent necessitated by the work injury and its effects during the life of the insured. In fact, the medical attention is supplied on behalf of the Institute by the approved Sick Funds, recognized as approved medical service. Vocational rehabilitation is provided by the Institute either directly or through the services of other bodies.

Benefits in cash

Injury allowance: This is payment for a period of incapacity to work as a result of work injury, for a maximum period of 182 days beginning the day after the injury, calculated by day, on the basis of 75% of wages liable for insurance contributions in the quarter-year prior to the injury. The daily injury allowance has a maximum limit (see table 1).

Table 1. Recipients of work injury benefits in Israel

¹ For disability and dependants’ pension, the annual figure is the number of recipients in April for each year. For injury benefits it is the total number of recipients during the year.

² As of 1980, the annual figure given under payment disability pensions is a monthly average of recipients.

Injury allowance is not paid for the first two days after the day of injury, unless the injured person was not capable of working for at least 12 days.

Work disability benefit (work disability pension): This covers those with a disability of 20% and over—a monthly pension according to the degree of medical disability, at a rate proportionate to wages and degree of disability. Recipients of disability pensions who belong to low-income groups receive an additional “income support” supplement (see table 1).

Work disability grant: This covers those with a disability of 5 to 19%—a one-time grant equivalent to the daily injury allowance 21 ´ the percentage disability.

Special pension: This covers those with a disability of 75% and over, and those with a disability of 65 to 74% who have difficulty in walking; provides financial aid for personal expenses and transportation, up to a maximum determined by law.

Special grant: This covers those with a disability of 75% and over, and those with a disability of 65 to 74% with difficulty in walking; provides aid in purchasing a car (under special conditions), aid in solving housing problems and acquiring special accessories needed due to the disability.

Vocational rehabilitation payment: This covers aid in diagnosis and professional guidance, rehabilitation allowance during period of studies (as a supplement to disability pension) and various expenses connected with studies, such as travel, tuition and learning materials; in special cases, a grant is given for the purchase of work tools.

Benefits to dependants

Dependants’ pension: This amounts to 40 to 100% of the full pension that the insured person would have been entitled to, had he or she been 100% disabled—taking into consideration the number of children. Recipients of dependants’ pensions who belong to low-income groups receive an additional “income support” supplement (see table 1).

Dependants’ grant: This goes to a widow who has no children at home and who was not yet 40 years of age upon the death of the insured spouse—a grant equivalent to 36 months of dependant’s pension.

Marriage grant: This goes to a widow or widower who remarries—a grant equivalent to 36 monthly pension payments, paid in two instalments—the first one right after remarriage, the second two years after remarriage (right to survivor’s benefit expires).

Vocational rehabilitation: This covers vocational studies, in the form of vocational training, payment of maintenance allowance during period of study, and various expenses connected with studies.

Maintenance allowance for orphans: This goes to a child who spends most of his or her time studying in high school or in vocational training—9% of the average wage as it was on 1 January, subject to a means test of the parent. Maintenance allowance is updated by the rate of the compensation paid in the course of the year.

Bar-Mitzvah grant: This goes to a boy reaching the age of 13 and a girl reaching the age of 12, at the rate of 2/3 of the average wage as it was on 1 January, updated by the rate of the compensation paid in the course of the year.

Grant following decease: At the decease of a disabled person who had a disability of 50% or over, to whom a disability pension had been paid, or at the decease of a disabled person who was at least 65 years of age (man) or 60 years of age (woman), or at the decease of a person who had received a dependant’s allowance—a lump sum equal to the average wage as it was on 1 January preceding the day of decease, updated by the rate of the compensation paid in the course of the year, to the spouse of the deceased (or in absence thereof, to child). To recipients of income supplement, the grant is equal to 150% of the average wage as stated.

Other aspects

Rehabilitation

The main scope of the Employment Injuries Insurance is to advance the welfare of the injured persons by encouraging them to return to work. Therefore the Institute supports the services of vocational rehabilitation to the disabled persons with a medical disability of 10% or more. Furthermore, the disabled is entitled to any extra income from work without affecting his or her right to the disability pension from the Institute.

Extension of coverage

As mentioned above, persons insured by the Institute include those who are not workers in the narrow meaning of this word, such as self-employed, vocational trainees and so on.

Description of the system

History

The first labour law promulgated during the British Mandate in Palestine (1922 to 1948) was the Workmen’s Compensation Ordinance 1922. This was replaced in 1947 by a more modern law based on the English Law of 1925. The main advantage of these laws was that through their interpretation the English innovations in the field of workers’ compensation were introduced in Israel.

The laws mentioned above were in force until 1 April 1954, when the Knesset passed the National Insurance Law 1954. This law authorized the National Insurance Institute to act according to the provisions of the law. The National Insurance Law was the first comprehensive social security law to include a wide range of National Insurance and statutory allowance programmes which were almost non-existent until the National Insurance Law came into effect.

The Law included three main branches of insurance benefits:

• old age and survivors’ insurance
• employment injury insurance
• maternity insurance.

Through the years, the National Insurance Law has been amended many times. The main amendments connected with workers’ compensation are:

• including the self-employed in the insurance system (1957)
• “work accident” was expanded to include accidents occurring while walking or driving to work.

Types of coverage

Workers’ compensation insurance for employment injury is administered by the National Insurance Institute. The insurance covers both cash benefits and benefits in kind for work accidents. Employers who contribute to the insurance of the employees are no longer liable under the law of Torts. However, they may be liable in case of negligence. Benefits paid by the National Insurance are deducted from the compensation received by the employee.

Besides covering work injuries, the Institute covers occupational diseases. There is a list of occupational diseases attached as the second appendix to Regulations 44 and 45 of the Regulations of Work Accidents Insurance. The list is almost comprehensive and in effect covers 49 types of work-related diseases. The system of recognition for occupational diseases is a mixed system. This includes the occupational diseases listed, but other diseases of occupational origin can, subject to certain conditions, also be compensated.

According to the National Insurance Law, “occupational disease” means a disease defined by the Law (Chapter 85) as an occupational disease and contracted as a consequence of work or on behalf of his or her employment or, in the case of a self-employed person, as a consequence of his or her occupation.

Some compensation principles

The main role of the Workers’ Compensation Law is that the injured person is entitled to the benefits granted by the law, whether his or her employer contributed to the Institute or not, and the injured worker is eligible to file a claim for these benefits.

The Claims Officer of the Institute is empowered by the Board of the National Insurance to decide whether an injury or work-related disease claim is valid. If claimant is dissatisfied with the decision, he or she can file a suit with the Labour Court and have the right to appeal to the National Labour Court of Appeal.

The applicant in the proceedings in the labour courts, in accordance with professional decision, is granted free legal aid by the National Insurance Institute.

Mechanism for updating benefits

Employment Injury Benefits are adjusted from the 91st day in relation to the increase of the average wage on 1 January following the payment and during the year in relation to the wage increase received by workers due to inflation.

Injury Allowance (182 days) is taxable at source. Disability and long-term benefits are updated according to the cost of living increment and according to the changes that took place in the average wage as it was on 1 January. Disability and long-term benefits are not taxable.

When an insured person reaches entitlement to old-age pension (65 years for men, 60 for women), he or she can choose between the two forms of benefits.

Finance—Contributions

All employers must contribute for their employees. Where an insured person is employed by several employers, each of them shall contribute as it he were the only employer. Self-employed and persons who are neither employees nor self-employed must contribute for themselves. The employer contributes to the National Insurance Institute. The average rate until 31 March 1970 ranged between 0.5 per cent and 3.0 per cent, and from 1 April 1971, between 0.7 and 4.0 per cent. From 1 October 1981 the minimum rate was 0.7 per cent and the maximum 2.4 per cent. From 1 July 1986, the standard rate of insurance contributions (0.7 per cent) has been determined without regard to the extent of risk in the various industries, as it was before 1986. As of 1 April 1987, the level of rates has been decreased due to low labour costs.

The rates of monthly contribution in the case of an employee shall be the percentage of the amount of his or her monthly income. In the case of other persons, the percentage shall be based on quarterly income.

The contributions are subject to maximum and minimum income of the insured. The maximum income for collection of contribution is calculated as four times the average wage for employees and for non-employees.

There are in the National Insurance Law certain exemptions from payment of contributions, such as an employee who received injury benefits for the time he or she received the benefits.

Prevention

The National Insurance Law does not concern itself with work-related accident prevention. Paragraph 82 of the National Insurance Law refers to injuries caused by negligence of the insured person. Sanctions are applied in the form of non-payment of benefits where the insured is unable to work for less than ten days.

The National Insurance Institute contributes to associations in the field of accident prevention, such as the Institute of Occupational Safety and Hygiene.

The National Insurance Institute maintains a fund to support the financing of activities aimed at preventing work accidents, such as research and the development of experimental means broadly applicable in areas such as safety, engineering, medicine, and industrial chemistry and hygiene.

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