Full Breakdown
New Legislation Eases Financial Burden for US Olim in Israel
2/26/2026, 9:57:05 PM
Legislative Overview
On Wednesday, the Knesset passed a significant bill that exempts new immigrants from the United States, known as olim, from paying Israeli National Insurance Institute (NII) contributions for the first five years after their aliyah, provided they are also obligated to pay US Social Security taxes. This legislation aims to eliminate the financial burden of double payments that has deterred many potential immigrants from making aliyah. The bill, which received unanimous approval in its second and third readings, will function as a temporary provision for ten years, with the possibility of extending it for two additional five-year periods.
Key Provisions of the Bill
The legislation, spearheaded by Religious Zionist Party MKs Simcha Rothman and Ohad Tal, along with Yesh Atid MK Merav Ben Ari, addresses a unique challenge faced by US citizens living in Israel. Currently, US citizens are required to pay both US Social Security and Israeli National Insurance, which can result in a combined tax burden of approximately 30% on their income. The new law will allow US olim to avoid NII contributions for five years, thus making aliyah more economically viable. The Treasury will compensate the NII for the contributions exempted under this new arrangement.
Impact on Immigration
The passage of this bill has been hailed as a major step forward by immigration organizations. Natah Katz, head of the Post Aliyah & Advocacy Division of Nefesh B’Nefesh, stated that the double payment issue has been a significant hurdle for potential olim over the past two decades. The new law is expected to encourage more US citizens to immigrate to Israel, as it alleviates a major financial concern during their initial absorption period.
Official Statements & Responses
Simcha Rothman expressed satisfaction with the bill's passage, noting that previous attempts to advance similar legislation faced challenges. He called on Diaspora Jews to consider aliyah, emphasizing the importance of removing economic barriers. Jeremy Saltan, an adviser for the ruling Likud party, highlighted that the legislation corrects a structural unfairness and makes aliyah more attractive for working families and professionals.
Criticism & Opposition
While the bill has received widespread support, some critics argue that the exemption does not address all financial burdens faced by olim, particularly regarding health insurance contributions, which remain separate. Additionally, concerns have been raised about the long-term sustainability of the NII funding model if a significant number of olim take advantage of this exemption.
What's Next
The new law is set to take effect retroactively from January 1, 2026, and will apply to new immigrants arriving during the next five years. As Israeli lawmakers continue to explore ways to reduce barriers to immigration, this legislation represents a proactive approach to enhancing the attractiveness of aliyah for US citizens.
