Reserve benefits claim – executive summary
In our tiny country, there is an obligation of regular military service, followed by military service as part of reserves.
In light of this, a reality is created in which everyone who has received an order to report is obligated to come and enlist regardless of their job status or business activity, a fact that harms the normal work sequence of the citizen and causes him financial damage.
The reserve benefit is intended to provide a substitute for the salary / business profit of the reservist, when in this article we will review the ways to exercise this right, we will present relevant tax plans and illuminate several dark points in the field of employer-employee relations.
Go ahead step!
Who is entitled to the payment of a reserve allowance?
- Anyone who legally served reserve service, regardless of their employment status at the time: employed / unemployed / self-employed.
- Those who served one-day or alternatively half-day service – will receive reserve compensation according to the time of service and this after submitting a signed and approved form 3010 including specifying the date or hours that you receive at the end of the service.
- A young worker who participated in an activity as part of the pre-military education activity for at least two consecutive days, provided that he worked at least 30 working days in the three months preceding the activity – in order to receive a “reserve” reward, he must bring a certificate of participation in the activity from the Ministry of Defense (a claim form for the grant in favor of participation in pre-military education, and in addition Confirmation from the employer of the wages paid to him for up to 30 working days.
- Every citizen who does reserve duty is entitled to payment from the Ministry of Defense, except for police officers, prison guards and members of the Knesset guard, who are not included in this law, and they receive payment for reserve service from the Ministry of Finance.
- If during the military service there was a period of imprisonment, there will be no compensation for these days, except with the special approval of a military court/senior judicial officer.
- If you work both as an employee and self-employed, it is important that you submit the claim personally as a self-employed worker to the National Insurance to complete the compensation you are entitled to, only after you have confirmed with your employer that he has received the reimbursement of the reserve benefits from the National Insurance.
What is the amount of compensation due to a reserve servant?
The rate of compensation per day will be the gross salary subject to insurance premiums (for a salaried employee) or the income subject to insurance premiums (for an independent employee), or a combination of both, (for those who were both an salaried employee and an independent employee) in the 3 months preceding the month in which the reserve service began, divided by -90, where the maximum benefit per day is NIS 1,441 per day.
Those who do not work will receive the “minimum” accepted by the reserve law which is NIS 196 per day.
- It is important to note that for the purpose of calculating the compensation, sickness benefits, maternity benefits, vacation pay, reserve benefits, unemployment benefits and work injury benefits will also be taken into account.
- Deductions of social security and health insurance premiums, income tax, payments to the reward fund and pension funds will be paid as usual to a salaried employee.
- Similar to other pensions that replace wages, work injury benefits, etc., a self-employed person whose income according to the annual report was higher than the income according to which he was paid the reserve compensation, will receive the differences after submitting the annual report, but also vice versa.
- In case of loss of a reserve certificate, it is possible to restore it at the city officer / triad officer.
- A controlling owner of a limited company will have to prove that he indeed received a salary during the aforementioned period, usually by presenting account statements and filling out a special appendix for the subject.
How do you claim the reserve reward?
There are two ways to receive the reserve fee, with each having advantages and disadvantages, when as we can see, there is no one correct “magic solution”, but each case individually.
Personal claim
A lawsuit sumbit:
- T. 502 must be filled out – personal claim for reserve benefits – MCAB Appendix 1.
- Attach confirmation of the reserve period T.3010.
- For the avoidance of doubt, it is advisable to attach a copy of a canceled bag / account management certificate to prevent errors during the transfer of the reward.
- Pay slips from all workplaces in the last six months, or in the case of minimum wage / unemployment, it is advisable to mark in section 4 – neither employed nor self-employed.
- send by fax / mail to the reserve department at the branch where he lives.
Advantages:
- The claim is under the control of the reserve officer, without the need for a “favor” from the employer or his knowledge.
- Saves the “headache” of inventing several work slips in the case of casual jobs \ with low wages. As mentioned earlier who receives according to the “minimum” amount.
- is received in full in the plaintiff’s account.
- Experience has proven that National Insurance does not properly deduct income tax and National Insurance, a fact that benefits employees but harms the self-employed.
Disadvantages:
- The claimant does not accrue social rights for the reserve period.
- In the case of a high salary, there is an impairment in the amount of compensation.
- Bureaucratic procedure before the National Insurance Institute.
Claim through the employer
A lawsuit sumbit:
The reserve certificate – T.3010 must be forwarded to the employer.
Advantages:
- Accumulation of full social rights, with the exception of vacation days.
- Receiving an immediate salary, together with the monthly salary.
- The bureaucratic procedure goes to the employer.
- There is no fear of excessive income tax deduction.
Disadvantages:
- The employer’s lack of professional knowledge / lack of knowledge of the law on the part of the employee may result in the non-accumulation of the social rights due during the reserve period.
- Experience has shown that not all employers pay 100% of the remuneration received in their account, (later it will be clarified how this situation can occur).
- When there are several employers, it becomes difficult to realize this compensation with each employer separately.
! Rights at work during reserve service!
The law prohibits the employer from firing a person because he went to the reserves, an employer who did so is expected to be fined, to pay double compensation and even be accused of a criminal offense with a civil fine as well, when the only possibility to do this is by obtaining a permit from the regional employment committee.
The law requires the employer to accrue to the employee most of the rights to which he is entitled as part of his work, including: recovery / illness / compensation, with the exception of vacation days, similar to the period in which he worked normally, and this in order to protect the employee.
The employer is obligated to pay the employee for pension, training fund, life insurance, compensation, etc. as if the employee never went to the reserve.
Compensation is due to the employee from his employer as a wage law, therefore the employee has the right to file a lawsuit according to the Wage Protection Law against an employer who refuses to pay the compensation or withholds it.
$ reserve claim – employer’s obligations $
An employee who chose to submit the reserve claim through the employer, will require the employer to file a claim for the return of the reserve fees he paid to his employees, which is done as follows:
- The employer will submit a claim on “T.501 Employer’s claim for the return of reserve benefits” – MCAB Appendix 2 at the National Insurance Institute branch.
- The National Insurance Institute will calculate the compensation based on the salary reported in the claim and will add to it the price additions according to the law.
- National Insurance will credit the employer’s account in the employer’s deductions file in the National Insurance, so that if there is a debt due to non-payment of periodic reports, reports 102, the right will be included in the account.
- The employer will pay the employee the additions in the next slip upon receipt of said additions, and will deduct from these amounts income tax, social insurance, social contributions, etc. exactly as a regular salary.
- The period of service must be reported, as it appears on the military form, without splitting the period of service.
- It is important to note that if the employer received more from National Insurance than what he paid to the employee, he is obligated to make up the difference to the employee, but he is not obligated to pay for social rights on amounts received, which are higher than his regular salary
In conclusion:
We all hope that the security situation will improve and make this claim unnecessary, but until then, it is important that we know how to maximize our rights as reservists on the one hand, and our duties as employers on the other hand.
The author of the article, Alon Tahori, is a qualified accountant and tax consultant, who holds a representation license with the National Insurance Institute, who manages a tax consultant’s office specializing in the representation of companies and self-employed people before the various tax authorities.