The Knesset plenum approved in second and third reading the National Insurance Bill (Amendment No. 152 - Requirement for Payment of Insurance Contributions within Seven Years), 2014 by MK Amnon Cohen (Shas).
The proposal seeks to determine that the National Insurance Institute will be able to demand payment of insurance premiums, at the latest, by the end of seven years from the date of payment. Insurance premiums that are not required to be paid during the aforementioned period will no longer be collected, and their non-payment will not affect the rights to an annuity or benefit. This provision will not apply in cases where the insured himself caused it to be impossible to demand payment of the insurance premiums from him, whether by failing to comply with a reporting obligation under section 355 or by failing to comply with a registration obligation under section 379, and in cases where the insured admitted to the existence of a debt in a manner that indicates that he knew about the debt even in the absence of sending a demand for payment as aforesaid. It is further proposed to determine that the provisions of the proposed arrangement will apply to payment obligations that, on the effective date, have not yet passed seven years from the date of payment.
The rationale: Debt ballooning to monstrous proportions
The explanatory notes to the proposal state: "We are witnessing situations in which the National Insurance Institute demands repayment of a debt years after its due date, and after it has accumulated to a large amount, without the debtor's knowledge. The amount of the debt may reach unreasonable proportions and lead to seizure orders, when the debtor was not even aware of its accumulation, or because he had never received a demand for payment before. The phenomenon mainly affects young people, who accumulated debt before their military service for months they did not work, and are faced with a demand to repay the excessive debt that accumulated as a result of interest, long after their release.""
MK Amnon Cohen: There is a change in perception and it was difficult to get the National Insurance Institute to change its approach, and I want to thank Director General Shlomo Mor Yosef for that. There is good news here that there will be no situation where the National Insurance Institute will come after 20 years and demand a debt that it has incurred.
In the second reading, 28 MKs supported the proposal without any opponents. In the third reading, 32 MKs supported the proposal without any opponents.
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