The Government today approved Prime Minister Benjamin Netanyahu’s and Immigrant Absorption Minister Sofa Landver’s proposal to grant a package of tax, health, education and employment incentives to returning residents that have been living abroad.  The decision equalizes the rights of returning residents with those of immigrants via the granting of personal income tax credit points and breaks.

According to Immigrant Absorption Ministry estimates, approximately 750,000 Israelis reside abroad.  The goal set in the aforesaid decision is to return approximately 15,000 of them to Israel per annum.

Prime Minister Netanyahu said that, " This is very important because these people are, first of all, our bone and our flesh.  Their absorption and economic integration, upon their return, is usually very quick.  Naturally, they have the same national background and they know the language and the culture.  They also are familiar with other cultures, the creativity and work standards of which, we are sometimes interested in adopting here.  A certain turning point is currently taking place.  Many of them left Israel due to the absence of possibilities and some would like to come back due to the existence of possibilities since the Israeli economy seems better than others, including those of developed countries.  Therefore, we welcome them and will now adopt a plan that will – for a limited time – offer the aforesaid benefits.    For all those who have relatives abroad , I daresay that is almost all of us, contact your relatives about today’s decision and tell them that it is not only right, but worthwhile, to return to the country, and bring them back.  This decision is very important and the goal that we are setting – 15,000 people annually – is significant."

The above-mentioned incentives are as follows:

Income tax – Residents who return after five or six years (depending on when they left) will be eligible for the same credit points as new immigrants (1/4 of a point for each of the first 18 months, 1/6 of a point for each month in the following year and 1/12 of a point for each month in the year after that).  The estimated cost of the foregoing is approximately NIS 30 million.

Customs – The status of returnees who return six years after leaving the country will be equalized to that of new immigrants (including vehicle taxes).  The estimated cost of the foregoing is NIS 65 million per annum.

Health insurance – Upon payment of the waiting period fee by the returnee, half of the sum will be refunded immediately.  After one year in the country, the remainder of the fee will be refunded.

Education – 1,600 extra hours for the benefit of returnees’ children will be added per week.

Employment and initiatives – Money from the Small Business Fund will be directed for the returnees’ benefit.  Returning residents will be eligible to receive professional training and retraining and employment guidance from the ministry of Industry, Trade and Labor.

In recent years in general, and in the current year in particular, there has been a change in expatriate Israelis’ view of the country; the Government deems their return to be in the national interest, including socio-economic interest.  This becomes more important given that immigration trends are trending downwards.

In late 2007, during Israel’s 60th anniversary celebrations, the government called on expatriate Israelis to return home.  Since 1.11.07, 24,000 Israelis have expressed their desire to return to the country have registered with the Immigrant Absorption Ministry site.  Approximately 5,000 Israelis returned in 2007, 10,000 in 2008 and 10,900 in 2009.

A 2008 Immigrant Absorption Ministry survey showed that returnees make important contributions to the Israeli economy.  According to the data, approximately 60% of returnees are of working age (between 18-50).  Their average monthly income is approximately 30% higher than the Israeli average.  The survey also showed that returnee households return the cost of the investment in them via taxation after an average of 18 months.