Our journey to cut expenses, be smarter with our money and reach financial freedom by our 50s
5 ways to get “free” money from the government
While the Israeli government taxes us and takes our money left and right, it also has several programs you might not know about where you can get some of it back. Most people are not eligible for every single one of these, but as we say, knowledge is power. Even being eligible for one can save you thousands of shekels per year. Each program has its own eligibility criteria. You can apply and find all of the relevant information online. Application is free.
Maanak Avoda (Grant for low income workers) – This is a grant that the government pays to salaried or self-employed workers in Israel if you meet certain conditions. You have to submit a little information on the tax authority’s website. The grant is based on income, parental status and age. In the best case, you can receive a nice surprise in your bank account. In the worst case, you wasted a few minutes of your time.
Tamat discounts – If you have a kid under the age of 3, you might be eligible for a discount on childcare. Certain chains of daycare centers (Emunah, Naamat, WIZO, Hevrat Hamatnasim, and others) are supervised by the Ministry of Economy and Industry, which will subsidize your tuition if you earn under a certain threshold. (If your gross combined income divided by your number of family members is under 5,300 shekels, you will likely be eligible for a discount.) Follow the application instructions on the site and submit the documents that are requested.
Tax return – Have you made any charitable donations in the past couple of years? Had a baby? Been unemployed? Switched jobs? You may have overpaid on your income taxes. You can file up to 6 years back. We did this for our 2021 taxes and ended up offsetting most of the taxes we paid after selling our PFICs. As this process is more time consuming than the others on this list, we chose to use a company that charged 10% of the projected amount instead of doing it by ourselves for free. We plan on doing it on our own for 2022. There is a simulator on the tax authority’s website that you can use to see if you’re eligible. The government reports that there are billions of shekels in unclaimed tax returns just sitting around. Why let it go to waste?
Arnona (municipal tax) discounts – Check your city’s website to see if you qualify for a discount. For example, cities offer arnona discounts to senior citizens, low income individuals and families, new olim, single parents, and people who recently finished their army service. This list is in no way finite, so it’s worth checking your city’s Arnona site.
Tax break for residents of certain peripheral cities and towns – Every year the tax authorities update the list of additional tax credits for residents living in certain locations. You can be entitled up to a 20% tax break for anything that income tax is taken off of. Bring proof of residence to your employer and update your status on your 101 form.
While some of these can be done retroactively, there are limits on how far back you can go. Unlike the COVID checks which magically appeared in our bank accounts, the government isn’t quite as excited to hand these all out like candy, which is why you need to know about them and apply.
What other government “cashback” programs do you know of?