The number of retirement-age Israelis is set to reach nearly 15% by 2030, from 10% today, meaning the national expenditure on the elderly is likely to grow from the current 10.2% of GDP to nearly 12%, an increase of 16 billion shekels.In Israel, the retirement age is 62 for women and 67 for men. Currently, taxation and pension policies that essentially work out to a 97% income tax on some retirees who continue to work past retirement age, although those taxes are greatly reduced if someone works past 70. The proposal would cut the taxes and penalties for working to 44%-67% of the person’s salary.
Surveys have shown that most people approaching pension age would like to continue working, but face barriers including discrimination, outdated skills and above all a taxation and state pension policy that serves as a strong disincentive.
In a follow-up article, Arlosoroff reports on a survey conducted by the business data firm BDI Coface for TheMarker, which revealed that only one in five workers hired by the 100 largest companies was over 45—revealing a picture of blatant discrimination based on pure prejudice:
Older job seekers are less likely than their younger peers to be hired, despite being perceived as more stable, experienced and capable of working longer hours because they don’t have small children at home.These results echo findings of a survey conducted for the Equal Employment Opportunity Commission by the Economy Ministry’s research division, which found that the hiring rate for employees aged 45 and up is just 1.3%, even though this group accounts for 38% of Israel’s labor force.
Source: Haaretz "Plan would reduce tax, pension penalties for working past retirement" (May 27, 2014); Haaretz "No country for old workers" (May 30, 2014)