Treasury extends unpaid leave benefit period

Employees and business owners who have not yet returned to normal activity, or who are torn between the reopening of the economy and the closure of the education system, are at present living with uncertainty of which the end is not in sight. The Ministry of Finance is now offering a leave without pay model that is much longer than in the previous round of fighting with Iran in Operating Rising Lion in June last year, but for some reason the ministry is not advertising this prominently on its website.

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According to the draft bill outlining the economic aid plan for Operation Roaring Lion released yesterday for public comment, employers will be able to put employees on unpaid leave even at the end of April – about six weeks from now – and the employees will still be entitled to aid.

As in the past, the bill states that entitlement to unemployment benefit is a function of the start of leave without pay, not of the date that the employee returns to work. A worker who goes on unpaid leave on April 28, even if he or she does not return to work for months, will be considered to be entitled and will receive unemployment benefit until the end of his or her period of entitlement at the National Insurance Institute.

The difference with Operation Rising Lion is that then the unpaid leave model was set for a week only. This was because the Ministry of Finance’s aid plan was announced one day before the operation ended, and reached the Knesset when the end date was already known. The result was a short period of entitlement, until the end of June 2025. The operation ended on June 24.

This time, not only does no-one know when the operation will end, but the Ministry of Finance’s working assumption is pessimistic. Sources involved in formulating the aid plan admit that if the operation ends surprisingly early, the entitlement period for unemployment benefit while on unpaid leave may have to be shortened through fast legislation. At the moment, that does not seem likely.

The unpaid leave model legislation will be fast-tracked and will be passed before the Passover holiday. Legislation of a plan for compensation to businesses, on the other hand, is expected to take longer, until mid-May at least.

Besides being extended in time, the unpaid leave plan contains several relaxations in the entitlement rules for unemployment benefit.

Published by Globes, Israel business news – en.globes.co.il – on March 20, 2026.

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