Quick answer: from January 2026, an Israeli resident who made aliyah from the United States is exempt from Israeli National Insurance (Bituach Leumi) contributions on employment or business income on which they actually pay US Social Security - for five years from receiving their oleh visa or certificate. Health insurance is still payable on that income, and National Insurance benefit rights are kept as if contributions were paid (National Insurance Law, Amendment No. 262, new section 350A).
What changed in 2026?
Israeli National Insurance (Bituach Leumi) is Israel's social security system. Until this year, many Americans who made aliyah paid social security twice on the same income: US Social Security (or self-employment tax) and Israeli National Insurance. Israel has totalization agreements with a number of countries, but not with the United States, so nothing prevented the double charge.
In February 2026 the Knesset passed the National Insurance Law (Amendment No. 262 - Temporary Provision), 5786-2026. It was published in Sefer HaHukim 3501, p. 312, on 1 March 2026, and it applies to contributions due from January 2026. It is a temporary provision, in force from 1 January 2026 to 31 December 2035, and the Minister of Labor may extend it by order for up to two further periods of up to five years each (section 3 of the amending law).
The law adds a new section 350A to the National Insurance Law, "Exemption from insurance contributions for a new immigrant", and a new Schedule 16-1. The schedule currently lists one country: the United States.
Who qualifies for the exemption?
Under section 350A(a), you qualify if all of the following apply:
- You are an Israeli resident - for National Insurance purposes, which is a separate test from income tax.
- You made aliyah from a country in Schedule 16-1 - today, only the US.
- Fewer than five years have passed since you received an oleh visa or oleh certificate under the Law of Return, or a certificate from the Ministry of Aliyah and Integration confirming you are eligible for assistance as an oleh.
- You actually pay social security in the US on that income, under US law.
Other countries can be added to the schedule only by ministerial order approved by the Knesset Labor and Welfare Committee (section 350A(d)).
Which income is exempt - and does it matter where I work?
The exemption covers income under sections 2(1) and 2(2) of the Income Tax Ordinance: business or profession (self-employed) income and employment income. It does not cover rent, dividends, interest or capital gains.
The test is whether you pay US social security on that income - not where you sit or who employs you. The law sets no condition about place of work or the employer's identity. When the National Insurance Institute raised concerns at the final committee session about an oleh working in Herzliya for an American company, the bill's sponsor answered that this was intended, and the text was approved without a location limit (Labor and Welfare Committee, 28.1.2026).
In practice, under the US rules summarized by the Knesset Research and Information Center (review of 5.6.2025), the people most likely to pay US social security after aliyah are:
- US citizens employed by an American employer, wherever they work; and
- US citizens who are self-employed, who owe US self-employment tax on net earnings of at least $400, wherever they work.
If you are a US citizen working for an Israeli employer, you generally do not pay US Social Security on that salary, so the exemption will usually not apply to it.
Do I lose National Insurance benefits?
No. Under section 350A(b), wherever a benefit depends on contributions having been paid, the exempt income is treated as income on which contributions were paid. The State Treasury reimburses the National Insurance Institute each year for the contributions it did not collect (section 4 of the amending law). Your insurance status itself does not change - your rights are not harmed, but not increased either.
What do I still pay?
- Health insurance - on the full income. The same law amends section 14 of the National Health Insurance Law (new subsection (g2)): income exempt from National Insurance still counts when calculating health insurance contributions.
- No minimum contribution, in the right case. Normally, a resident without income pays a monthly minimum. Under section 350A(c), that minimum (section 348(b)) does not apply to you if you have no other income, or your other income is below the minimum amount in Schedule 11.
- National Insurance on any other income that does not meet the test - for example, a salary from an Israeli employer.
For context, under the National Insurance Institute's 2026 rates (btl.gov.il), a resident working in Israel for a foreign employer that does not pay contributions for them pays at self-employed rates - up to 12.83% National Insurance plus 5.17% health. A resident working abroad for a foreign employer pays the lower "income not from work" rates (up to 7% plus 5.17%). For a qualifying US oleh, the exemption removes the National Insurance part; the health part stays.
How do I claim the exemption?
Implementation will in practice be retroactive: you will need to show that you paid social security in the US, and the exemption will then be applied (Labor and Welfare Committee, 28.1.2026).
For every year in the five-year window, I would keep:
- your oleh visa or certificate (or Ministry of Aliyah certificate) with its date;
- proof of US social security paid - Form W-2 (employees) or Schedule SE with your US return (self-employed);
- your Israeli assessments and National Insurance demands for the same period.
Made aliyah from the US?
Check whether the exemption applies to your income before the next assessment arrives.
Arrange a consultationWhat about returning residents and Israelis working for US companies?
The exemption is for olim. A returning resident (toshav chozer) is not covered just by being a returning resident. The definition does, however, include anyone holding a Ministry of Aliyah certificate confirming eligibility for assistance as an oleh - so if you returned with that kind of certificate (for example, as a citizen-oleh), check exactly what your certificate says.
An Israeli who never made aliyah and works remotely for a US company gets nothing from this law. The existing rules continue to apply to them.
Is this the same as the 2026 income-tax benefit for olim?
No. This is a National Insurance law. The separate 2026 income-tax incentive for olim and returning residents is a different law, run by the Israel Tax Authority, with its own conditions and dates. One does not depend on the other. I explain the income-tax side in my guide to Israeli tax for new olim.
How I can help
I advise new olim and their US advisors on Israeli tax and on National Insurance - including whether this exemption applies to your income, and how it fits with your income-tax position. I also handle Israeli tax compliance - Israeli tax returns and reporting - and represent clients before the Israel Tax Authority.