Maanak Avoda (A work grant or a negative income tax) is undoubtedly one of the best announcements that a salaried or self-employed worker must know and enjoy. This is about extra money coming to the employee, regardless of the other rights or taxes.
This guide is short for getting it right – short and to the point. For more information, read our comprehensive article about work grant (Negative Income Tax).
What is a Work Grant?
A work grant (in Hebrew “Maanak Avoda” – מענק עבודה), also known as a negative income tax or income grant or employment grant, is a payment that the Israeli tax authority pays to all salaried and self-employed workers who meet the eligibility conditions as written later in the article.
In practice, the grant is given to those who work (as a salaried or self-employed person) and if their wages are set low. So the tax authority purpose is to encourage the population to continue to work and, accordingly, also receive a valuable income.
A work grant can be submitted each year – for a previous tax year and sometimes up to two years back.
Who can get a work grant (Maanak Avoda)?
A work grant (Maanak Avoda) 2020 (For the 2019 tax year) only comes to those who meet the following eligibility conditions – all together:
- An employee who has income in the tax year – a salaried employee with income from work, or an self-employed employee with income from a business or occupation.
- Property test – For those who do not have more than 50% of property rights to real estate (apartment, shop, land, etc.) in Israel or abroad, besides a single housing unit. This is also valid for the spouse and the financially dependent child, together or separately.
- Income level test – only for those whose average monthly income (annual income divided by the number of months worked) is within the following range:
- Anyone aged 23 and over who is a parent of 1 or 2 children, or anyone over the age of 55 even without children – his salary range is between NIS 2,090 and NIS 6,198. (If single parent – range NIS 1,290 – NIS 9,502).
- Anyone aged 23 and older and that has 3 children and more – his salary range is between NIS 2,090 and NIS 6,807. (If single parent – range 1,290 NIS – 11,650 NIS).
For example: A 40-year-old worker with 3 children and earning NIS 6,800 and one apartment. Are eligible? Yes!
Other eligible people:
- Legal heir – can file on behalf of the testator if the testator complied with the above eligibility conditions.
- An employee with a disability who has been assigned a adjusted minimum wage – is eligible even if he has no children or under 55 years of age.
Note: Anyone who works for a relative or holds 25% or more in the company where he works – is not eligible for all these working months.
How to get a work grant?
A work grant is not paid automatically, a claim (application) must be filed with the income tax office for free and without assistance from outside parties. You can apply through the Israel Post Office or the Tax Authority website:
1. Israel Postal Office
- To take an ID card and a canceled check or bank account management certificate.
- To go to Post Office or Agency until 30.11.2020.
- To ask to file a work grant claim and state in the claim form: number of employers of the plaintiff and of his/her spouse, if worked as a self employed, and personal information.
- Some of the form will be left by the plaintiff and some by the postal clerk.
- The claim number on the form and is used as the status of the claim.
2. The Tax Authority website
- To enter the online system on the Israeli tax authority website at this link (in Hebrew) – only those who have submitted in the last two years (no matter which way).
- To choose the tax year for which it is filed – can be filed by December 31, 2020 for the 2018 grant or until December 31, 2021 for the 2019 grant.
- To indicate in the claim form: Identity number and date of issue, number of employers of plaintiff and of his/her spouse, if worked as a self employed, identification question (passport and departure from the country).
- The claim number is obtained via a text message on the phone and used as a check on the status of the claim.
What to do if I haven’t been able to submit on time?
Anyone who has submitted in the last two years, no matter which way, and and has not been able to submit in time via the Israel Post Office – can submit through the site.
Anyone who has not filed in the last two years and and has not been able to submit in time via the Israel Post Office – may apply for a work grant claim late, but the application can be denied. In this case, it is necessary to contact the tax authority by the phone and explain with justified reasons why this was not enough in time.
When work grant paid?
Once the claim is filed, the tax authority receives the application and checks it within 90 days or up to a maximum of 15.07 (July 15).
If the request is approved, you receive the money in several payments (between one payment and 4 payments) – the later you submit – the less payments. If the amount is less than NIS 810, it is paid for one payment.
Payment dates are: 15.07, 15.10, 15.12 or 15.02 for the following year. The money is transferred directly to the bank account.
How much money possible to get a work grant?
The amount of the work grant (Maanak Avoda) varies according to the plaintiff’s income and the spouse’s income, additional income, if any, number of children, age and marital status.
In addition, an employee who is the parent of one or more children is entitled to an additional 50%. Also an employee who is a single parent and raises his own children is entitled to an additional 50%.
The amount of the work grant varies according to the data as previously written and the amount can range from NIS 20 per month to NIS 720 per month, ie up to NIS 8640 per year.
How to check eligibility without actually filing?
The tax authority allows everyone know whether they are eligible for a work grant (Maanak Avoda), even without having to file a claim. It is possible to test anonymously through a simulator (in Hebrew) which is less accurate or through a system (in Hebrew) with personal details that checks more accurately.
What to do if the claim is denied?
- It is possible to file an objection with the Tax Authority if it has stated that the claimant does not meet the conditions of eligibility, within 30 days of the determination.
- If an objection does not help, it is always possible to appeal to the district court in the jurisdiction.
Income tax refund or Negative income tax?
There is no connection at all between income tax return and negative income tax (Maanak Avoda / work grant). Such a tax benefit does not affect the other at all, these are two different rights, each with their own eligibility conditions.