Dear Clients,
We hereby wish to bring to your attention that on May 4, 2026, the Economic Assistance Program Law (Temporary Provision) (Assistance to Businesses and Public Institutions), 5786-2026 (the “Temporary Provision”), was published, establishing a compensation framework for businesses and public institutions throughout Israel that were harmed as a result of Operation “Roaring Lion” (Shaagat HaAri”), which commenced on February 28, 2026.
The Temporary Provision establishes a compensation mechanism for “qualifying expenses”, like the the previous frameworks, but it includes adjustments designated for the current period of hostilities.
Claims may be filed from May 17, 2026, and until 90 days from the end of the eligibility period.
The Compensation Fund is required to decide on a claim within eight months. An objection to a decision rejecting the claim may be filed within 60 days, and an appeal to an Appeals Committee against a decision rejecting the objection may be filed within an additional 60 days.
Eligibility Conditions for Compensation:
Under the current framework, similarly to previous frameworks, businesses that experienced a decline in turnover during the eligibility period may file a claim for compensation, if they cumulatively satisfy the eligibility conditions:
- The business’s annual turnover must be between NIS 12,000 and NIS 400 million.
- The business must show a decline of 25% or more between turnover during the eligibility period and the determining turnover for the base period; for this purpose.
- The eligibility period, namely the period during which the damage was caused, is the months of March-April 2026, together. Regarding businesses reporting on a cash basis, which receive receipts in the following month, as well as execution contractors, the eligibility period is the months of May-June 2026.
- The base period, according to which the decline in turnover is examined, is generally the months of March-April 2025. Regarding businesses located in an area that was harmed during the months of March-June 2025, mainly localities in the north that were evacuated pursuant to government decisions, or businesses that hosted residents from evacuated localities during 2025, the base period shall be the months of March-April 2023.
- The decline in turnover must result from Operation “Roaring Lion” and not from other reasons.
- The business must maintain books lawfully for 2026 and submit its periodic VAT reports.
Compensation Tracks:
- Fixed Grant Track – designated for small businesses whose annual turnover ranges between NIS 12,000 and NIS 300,000. Under this track, compensation is granted in fixed amounts ranging from NIS 1,864 to NIS 14,940 per month. The amount of the grant is determined according to the relevant compensation bracket, which is examined based on the rate of decline in turnover and based on the business’s annual turnover.
- Qualifying Expenses Track – designated for medium-sized to large businesses whose annual turnover ranges between NIS 300,000 and NIS 400 million, under which compensation is calculated according to a formula that includes two main components, similarly to previous frameworks:
- Participation in salary expenses – intended to assist in financing the salary costs of employees whom the employer continued to employ even though there was a decline in turnover;
- And participation in fixed expenses – intended to cover expenses that the business was required to continue bearing notwithstanding the period during which there was a decline in its activity.
- The compensation cap is NIS 600,000 for businesses with annual turnover of up to NIS 100 million; for businesses with higher annual turnover, the compensation cap is up to NIS 1,200,000.
Additional Relief in the Possibility of Receiving Unemployment Benefits During Unpaid Leave
- Under the Temporary Provision, an additional relief measure was approved regarding the possibility of receiving unemployment benefits during unpaid leave that occurred during Operation “Roaring Lion”.
The original framework, the full details of which can be found in our previous publication, provided that the minimum period of unpaid leave entitling an employee to unemployment benefits is 10 consecutive calendar days. - At present, the period has been shortened to at least 5 consecutive days, commencing on February 28, 2026, or March 1, 2026.
- In other words, an employee who commenced unpaid leave for at least 5 days from the first working day of the hostilities (Saturday or Sunday, as applicable), may receive unemployment benefits, subject to satisfying the other requirements.
- We remind you that employees may be placed on unpaid leave retroactively, so that with respect to employees who, as of today, have not received salary for those days and did not report to work (where the workplace was able to operate), the possibility of unpaid leave on a retroactive basis may be considered.
Our firm has accumulated extensive experience in assisting businesses under previous compensation frameworks and has represented many clients in claim and objection proceedings, and in the management of appeals and administrative appeals, in a manner that led to the cancellation of payment demands and the completion of compensation payments.
For any questions, our team is at your disposal and can assist your business at all stages of the process.
Yours,
The Tax and Labour Law Departments
This memorandum includes general information; it does not constitute legal advice or a substitute for legal advice and should not be regarded as such. This client circular is submitted as a service to our clients, with the clarification that in every specific case, an examination and discussion must be conducted according to its individual circumstances.
