Health taxes are to be reflected by your income: higher income means higher health taxes

The Knesset Health Committee has decided to alter its February 19 decision to raise monthly health taxes by a uniform rate for all Israelis and instead charge more for higher-income residents and less for those with lower incomes. 

Committee chairman MK Yoni Mashriki, who asked for this amendment, said that up to 60% of the average salary would be taxed at 3.235% of monthly income, and for those with a higher income – 5.165% instead of 5.15% – as previously proposed by the Finance Ministry. 

The government’s plan to raise the health tax will provide NIS 1 billion for mental health services, especially for those suffering after October 7.

The health insurance tax is levied at 3.1% on the first NIS 7,522 and at 5% on the difference between that figure and the ceiling calculated for monthly income at NIS 49,030. 

According to Prof. Gabi Bin-Nun, a senior health economist in the health systems management department at Ben-Gurion University of the Negev (BGU) in Beersheba he said at the February meeting that due to the salary ceiling required for health insurance, the tax increase would be regressive and harm people with low incomes. He wondered why another, more progressive tax source, such as the income tax, was not selected to finance the enormous costs of the Gaza war.

Health committee approves State Health Insurance Law amendment

On Wednesday, the Health Committee approved the second and third readings of an amendment to the State Health Insurance Law, which increases the health tax. Mashriki demanded that those with low incomes be considered and that the additional budget received would indeed go exclusively to the mental health system. He also wanted the committee to receive detailed information from the Finance and Health Ministries on the matter and the new service of the health funds.

He asked the Treasury to investigate the possibility of completely canceling the increase for those with low incomes and promised to hold follow-up meetings to ensure that the funds are indeed significantly increasing the scope of mental health care.

The approved law also stipulated that the health minister would be required to report to the committee on the budgetary additions to the national mental health program annually for eight years.

Yesh Atid MK Yaron Levy stressed the need to devote state money to shorten the waiting times for a psychologist, complete transparency, and a transparent annual report to the Health Ministry’s committee on implementing the plan.