Sick Leave for the Self-Employed in Israel: What Protection?

In Israel, a sick employee is compensated by their employer from the first days of absence, under the sick pay law (chok dmei machala). A self-employed person (atsmai), on the other hand, has no right to any public daily allowance for ordinary sick leave: the national scheme simply does not provide a cash benefit for this situation. It is one of the most concrete, and least known, differences between the two statuses.

This difference does not mean a self-employed person is left completely without help. It means that the protection that does exist, through Bitouah Leoumi (the National Insurance Institute), does not work in the same way or at the same time as ordinary sick pay. Understanding this mechanism makes it possible to know precisely what needs to be covered elsewhere.

What an employee on sick leave receives

For an employee, Israeli law governs compensation from the start of the absence: the exact terms (waiting days, rate of compensation according to the accumulated sick leave seniority) are set by law and paid directly by the employer, who is then reimbursed in part by a compensation fund depending on the case. The employee therefore generally receives replacement income from the very first days of incapacity, even before a long-term diagnosis has been made.

What a self-employed person receives, and from when

For a self-employed person, this mechanism does not exist. Bitouah Leoumi covers the self-employed for most social risks (old age, disability, work accidents), but not for ordinary sick leave, whether it lasts three days or three weeks. Two schemes do exist, however, for more serious situations.

General disability insurance: a wide-meshed safety net

A self-employed person recognised as unfit for work on a lasting basis may claim the general disability allowance (nechout clalit) from Bitouah Leoumi, under the same medical conditions as an employee: a medical disability rate of at least 60% (or 40% in certain cases of multiple disabilities), combined with a significant loss of earning capacity. It is a scheme designed for lasting or permanent disability, not for a few weeks' absence: the medical file, the assessment by a committee and the payment of the allowance take time, and the amount depends on the recognised disability rate and on family circumstances.

In other words, a severe flu, an operation with three weeks of convalescence, lower back pain that immobilises you for a month: none of this gives the right to the general disability allowance, since the 60% threshold concerns a lasting incapacity, not a one-off episode.

Work accidents: different cover, with a waiting period

If the incapacity results from an accident that occurred in the course of professional activity, a specific scheme applies, with its own compensation rules. For a self-employed person, however, this scheme has a notable difference from that of employees: under the regulations in force, a self-employed person cannot claim the work accident allowance during the first twelve days of incapacity following the accident, a waiting period that does not exist in the same terms for an employee.

The real gap: between the first day of sick leave and the disability threshold

It is this space, between ordinary sick leave that gives the right to nothing, and a disability recognised at 60% that gives the right to a pension, that is the main point of vigilance for a self-employed person in Israel. In practice, a self-employed person who cannot work for several weeks for health reasons, without their condition being classed as lasting disability, generally receives no replacement income from the public system during that period.

For an employee, the employer absorbs this risk. For a self-employed person, nobody absorbs it automatically: they must decide in advance how they wish to organise themselves if this situation arises.

How the self-employed generally fill this gap

Faced with this absence of an automatic safety net, the most common solution is to take out private loss-of-income insurance (sometimes called work incapacity insurance), designed specifically to pay replacement income during a work stoppage, under conditions and waiting periods defined in the contract. Some self-employed people also choose to build a dedicated precautionary savings pot, in addition to or while waiting to finalise suitable cover.

Before signing a contract of this type, a few points generally deserve careful checking: the waiting period (the number of days of absence before payments begin), the maximum length of compensation, the definition of work incapacity used (total inability to practise one's own profession, or inability to carry out any activity, which greatly changes the real scope of the cover), and exclusions linked to medical history. These are technical clauses, but they determine concretely what will, or will not, be paid out on the day you need it.

The right level of cover depends on several factors specific to each situation: the amount of fixed monthly expenses, whether there is a spouse with income, whether or not the activity is physical, age, and health history. There is no generic answer valid for all self-employed people, and it would be unwise to present one as such. For retirement, a comparable scheme now exists: our article on the three protections not to neglect as a French-speaking freelancer in Israel, available on this blog, covers this subject from a broader perspective, alongside health and death cover, a theme we also detail on our life insurance in Israel page.

If you are self-employed and have never put a solution in place for this kind of situation, the simplest thing is to talk to a broker who can examine your actual situation, your income and your expenses, before guiding you towards a suitable option. You can contact us to review this, with no obligation.