Israel has withheld NIS 1.5 billion in Palestinian workers' pension funds.
Kav LaOved, an organisation protecting disempowered workers’ rights in Israel, filed an appeal against the Israeli government, the Population, Borders and Immigration Authority, and the Ministry of Finance for mismanaging Palestinian workers’ pension funds.
The organisation determined that Israel has withheld NIS 1.5 billion in Palestinian workers’ pension funds.
The Israeli government deducts a set amount from workers’ paychecks for pension plans. Then, when a worker encounters an insurance-qualifying life event, such as disability, old age, or the death of a partner, they can claim pension insurance.
However, Palestinians working in Israel seldom have access to their pension insurance, even though the state deducts money from their paychecks in an identical fashion.
Kav LaOved found this is largely because Israel neglects to inform Palestinians that they even have pension plans. The little information that is provided to Palestinians is not in Arabic, and erroneously reclassifies pension plans as “insurance savings.”
By masking Palestinians’ pension plans as “savings,” Kav LaOved claims the state covertly encourages Palestinians to prematurely withdraw money from their pension plans. Not only does this result in Palestinians paying extremely high taxes on such withdrawals, but they also unknowingly disqualify themselves from claiming pension insurance later on.
The state’s negligence and manipulations have resulted in only one Palestinian receiving pension funds for old age in 2013, three in 2014, and 113 in 2015.
There are approximately 50,000 Palestinians working in Israel.
Kav LaOved also found that the Israeli government has inexplicably canceled basic coverage from Palestinians’ pension plans, such as coverage for disability.
Attorney Michal Tadjer told the AIC that on this matter, no one can explain “when or [why].”
The appeal argues that this haphazard system constitutes “the violation of property and theviolation of equality” and “thus [amounts] to the exploitation of a marginalised,poor workers sector that lacks a voice.”
Kav LaOved insists that the state must provide adequate information about the pension system to Palestinian workers, treat Palestinian workers’ pension funds as pensions, and restore insurance benefits that have been inexplicably canceled.