In The News - February 03, 2011
 
Temporary Closure of the U.S. Embassy Tel Aviv American Citizens Services Unit
The American Citizen Services Unit (including the Federal Benefits Unit) will be closed for renovations from Friday, February 11 through Tuesday, February 22, 2011, and on Thursday, February 24, 2011. The American Citizens Services Unit will process a very limited number of emergency cases during its closure.  Pleasure travel and pre-purchased airline tickets do not qualify as emergencies.  To request an emergency appointment, email AMCTelAviv@state.gov.  Otherwise, schedule your appointment after our renovations at http://israel.usembassy.gov/consular/acs/appointments.html.  The U.S. Consulate General in Jerusalem (https://evisaforms.state.gov/acs/default.asp?postcode=JRS&appcode=1) and the U.S. Consular Agency in Haifa (http://israel.usembassy.gov/haifa.html) will be open for business as usual. 
 
 
Changes to Procedures for Consular Reports of Birth Abroad (CRBA):
The Department of State is currently redesigning the Consular Report of Birth Abroad (CRBA, Form FS-240). The redesigned CRBA (an official record confirming that a child born abroad acquired U.S. Citizenship at birth) is being updated with a variety of state-of-the-art security features to help prevent fraud and identify theft.

Worldwide, new appointments for Consular Report of Birth Abroad services are suspended until further notice.  We apologize for the inconvenience and will post updates as they are made available.  If, however, you currently have a valid scheduled appointment for Consular Report of Birth Abroad services, the Embassy will honor your appointment. 
If a foreign-born child who has never been documented as a U.S. citizen is traveling within the next six weeks and can provide evidence of travel,  email us at AMCTelAviv@state.gov to request an emergency appointment.  If the child qualifies, an emergency passport can be issued.  However, applicants who have come to the Embassy with an appointment for passport or other services but instead are requesting a Consular Report of Birth Abroad will not be admitted for processing. 
 
American Citizen Services Unit Visits:  Beit Shemesh, Beer Sheva & Dimona
The American Citizen Services Unit plans to bring our services to American communities during our upcoming renovations.  You are welcome to schedule an appointment for the following services:  notarials, Social Security Numbers, Report of Death, and passports.  Please contact our American warden for each location if you wish to make an appointment: 
Changes to the Federal Benefits Unit (FBU):
The best way to reach FBU Tel Aviv is via email at TelAvivFBU@state.gov or via fax at 03-516-5880.  We aim to respond to you within ten business days.  We no longer accept telephone inquiries in Tel Aviv.  You may call the FBU Jerusalem call center from 8:30 am to 13:00 Monday through Thursday on 02 630 4031.  FBU Tel Aviv walk-in inquiries are:
Wednesdays, 8:30 am to 11:30 am for all Federal Benefits services EXCEPT for Social Security Number applications.
Fridays, 8:30 am to 11:30 am for Social Security Number applications ONLY.  (Note that we are closed the last Friday of the month.)
 
Pre-Draft Seminar for Lone Soldiers
 
The Lone Soldier Center in Memory of Michael Levin would like to invite all recruits who are drafting as lone soldiers into the IDF in the next several months to our Pre-Draft Seminar.  
The Seminar will take place:10/02/2011 at 14:00 PM at Beit HaChayal of Jerusalem (Soldier's House) 3 Haloof David Shatieel, Jerusalem - 5 min walk from Central Bus Station
The seminar will be conducted in the following languages:
English, Spanish, French and Russian.
Many topics will be covered such as:
  • What to bring on the first dayRights of a lone soldier (salary, leave)
  • What to expect during ones service
  • Who to contact should you require help and much much more.
This seminar is a joint venture with the Ministry of Immagrant Absorbtion 
For more information call the Lone Soldier Center Office at:02-5022211
 
IDF sets up lone soldiers department
By Yaakov Katz, Jerusalem Post. 23/01/2011
 
New department to give extra support to 5,000 lone soldiers, many who have no families in Israel.
 
The IDF’s Human Resources Directorate has established a new department to look after the thousands of lone soldiers, about half of whom immigrate to Israel without their families.
 
According to the IDF, there are about 5,000 lone soldiers in the military, and about half are in combat units.
Some 46 percent have family in Israel but are alienated from them and therefore receive lone-soldier status in the IDF.
 
The “Lone Soldiers Department” was set up in September and is stationed at the Tel Hashomer Base near Tel Aviv. The department has established ties with various civilian organizations that promote aliya such as Nefesh B’Nefesh and the Jewish Agency and works together with other organizations set up to assist lone soldiers such as the Lone Soldier Center in Jerusalem established in memory of Michael Levin from Philadelphia who was killed during the Second Lebanon War.
The decision to establish the department was made after the IDF Behavioral Science Department conducted a survey last year among the 5,000 lone soldiers.
 
“The soldiers wanted more support,” Maj. Lital Rotem, the head of the new department, said on Thursday. “Our goal is to create the best support system possible so lone soldiers can complete their military service successfully.”
 
Since establishing the department, Rotem has been busy meeting lone soldiers, their commanders and representatives of various organizations in an effort to create programs that can help the soldiers. One example was the recent launching of a series of classes for lone soldiers to teach them how to manage a budget while in the military.
 
“Many of the soldiers receive stipends from the IDF but do not always know how to manage their expenses,” Rotem said.
 
Another new initiative was the opening last February of a hotline, manned 24 hours a day, for lone soldiers in need of help either within the military or when on leave. The hotline can also be used by civilians who want to help lone soldiers by donating supplies or inviting soldiers to their homes over the weekend. The number is (03) 737-5200.
 
 
The shekel drops / Does earthquake insurance make sense?
 
An earthquake. That's a good description for the study that the National Economic Council, an arm of the Prime Minister's Office, published last week. An earthquake, literally and figuratively, in that it shakes up preconceptions and describes how financially prepared Israel is for a temblor of gigantic proportions, the kind not experienced here for centuries, but that will inevitably happen one day - the kind of quake that would shatter homes and infrastructure up and down the land at the same time.
 
The study found, predictably, that Israel isn't ready at all for any such mega-disaster. Especially worrisome was the council's conclusion that the insurance companies aren't ready either. If the collective damage to Israeli homes from a big earthquake mounts beyond $10 billion, at least some of the insurance companies could wind up in bankruptcy, the council concludes. A statement like that could fairly be considered an earthquake in and of itself.
 
To the best of our memories at TheMarker, this is the first time an official, senior body in the State of Israel has admitted that the insurance companies are not ready for giant earthquakes, and that they could collapse. Even if they thought so, official bodies usually tend to keep such thoughts to themselves in order not to arouse irresponsible thoughts among the general public, for instance about whether or not they should buy earthquake coverage.
If the insurance companies are going to collapse in a major quake anyway, the irresponsible public might think, then why pay good money for coverage?
 
The answer to that evidently lies first and foremost in geography.
 
The Great African Rift stretches 4,830 kilometers, from Mozambique in the south to Syria in the north, and passes right under the Dead Sea and Lake Kinneret. This yawning chasm is the source of temblors in Israel, and more to the point, anybody living alongside this scar on the face of the planet - for instance in the Jordan Valley, the eastern Galilee and the Arava - needs to insure their home against earthquake.
 
This is for two reasons, one being that homeowners along that line are more likely to experience earthquakes, from tiny ones to continent-shakers, so in any case they should buy insurance. The second is that in their case, there is no risk of the insurance company going belly-up. Even if Beit She'an, which is right on the rift, were to be destroyed again, no insurance company would founder as a result. Simply, there are no great concentrations of population along the rift in Israel.
 
To drive home the point, let us look at the mega-quake that shook Chile a year ago, which measured 8.8 on the Richter scale. It was one of the most powerful in recorded history. But because the quake happened in a relatively low-density area, the damage was not vast - it amounted to about $10 billion, and no insurance company went broke as a result.
 
However, the issue is far more acute for anybody living along the Israeli coast and greater Tel Aviv area. The chance of a quake destroying Tel Aviv is much smaller, if not infinitesimally so. And in any case if a quake happens that is so shattering that it destroys the greater Tel Aviv area, probably nobody will be left to pay anything anyway.
 
Insurance companies can afford to rebuild Beit She'an. They would have tremendous difficulty rebuilding Tel Aviv, where the costliest assets of Israel are located, assets worth hundreds of billions of dollars.
 
Is there any reason to buy coverage in Tel Aviv?
 
So what is the point of buying insurance coverage in Tel Aviv? Let's put it this way: In the event of a mega-quake, the state will have to take over from the insurance companies and save the citizens itself. But since the state wants to encourage its citizens to behave responsibly and buy insurance, it will have to create a discriminatory policy - giving more help to people who bought insurance, even if the insurance was rendered meaningless by the sheer scope of the disaster, causing the insurance vendor to crumble.
 
People who scorned buying insurance will get less help. And that in turn makes it sensible to buy earthquake insurance, even if exercising the policy is done indirectly, through the pocket of the state.
 
Will the state however have the horse sense to adopt such a policy, to preserve the merit of earthquake insurance?
 
At this very time, the state faces just such a conundrum, albeit smaller in scale, following the fire on Mt Carmel in December.
 
The accountant general at the treasury, Shuki Oren, is shaping government policy on compensating homeowners whose homes burned down. It turns out that 74 families suffered that fate, losing everything they had to the flames.
 
The heart bleeds for them, and the truth is that their number is small enough for the state to be able to afford succor for all without thinking twice: It could rebuild all their homes easily.
 
But it must not. The Carmel disaster could create a precedent for something much broader - the entire insurance market in Israel. Most notably, earthquake insurance.
 
The state must stick to its principles, and first and foremost help the people who bought insurance for their homes. Even if that means people who lost everything they had won't be able to rebuild, the state must stick to its principles. The precedent at stake matters more.
 
This story is by: Meirav Arlosoroff, TheMarker, Ha’aretz. January 26, 2011
 
 
Mortgage payments could rise 25% by year-end as rates jump
 
As interest rates continue to creep up, homebuyers who took out variable-rate mortgages over the past two years may start feeling the crunch: Their monthly payments could be 25% higher by the end of the year than when they took them out.
 
On Sunday, Bank of Israel Governor Stanley Fischer announced an increase of 0.25% in the bank's representative rate for February to 2.25%, after it remained unchanged at 2% for four months. Fischer has said he wants to return rates to a "normal" level, after they reached an all-time low of 0.5% in mid-2009, during the global financial crisis.
 
These low rates have been largely credited with fueling the housing market, as they subsequently pushed mortgage rates down to historical lows. Housing prices climbed by another 17.3% in 2010, following their sharp increase in 2009.
 
In addition, the total sum of outstanding mortgages increased 15% over the course of 2010.
 
These were the reasons cited by the central bank for its decision to raise rates in February.
 
The rate increase directly affects homebuyers who took out variable-rate mortgages. In 2009, most new mortgages carried variable interest, and by 2010, the bank reported that large, variable-interest mortgages accounted for 85% of all new loans. The bank took several steps to encourage borrowers to choose fixed-rate mortgages in 2010, and the rate of new variable-rate mortgages has been dropping.
 
A homebuyer who took out a 20-year mortgage of NIS 500,000 in the middle of 2009, for example, when the prime interest rate was 2% (1.5% more than the bank's representative rate ) would initially have been paying out a monthly sum of NIS 2,530, according to Dudi Meizlik, head of mortgages at Mercantile Bank. With the current rates, the monthly payments on such a loan is NIS 2,965.
 
If the Central Bank's interest rate hits 3.25% by the end of the year, as many expect it will, the monthly payments on such mortgages would be NIS 3,230, about 25% more, said Meizlik. That family will be paying another NIS 10,500 a year.
 
Meizlik said that more homebuyers are taking out fixed-rate mortgages now than they were before.
 
"If in 2009, 80% of new mortgages carried variable interest, now it's only 50%," he said. People will further shy from variable-rate loans as expectations strengthen that interest rates will increase, he predicted, and by the end of the year, only 30% of new loans will be variable-rate.
 
Borrowers who find themselves in financial straits because of ballooning mortgage payments can always refinance, Meizlik noted. The big advantage of variable-rate mortgages is that there are no fees for refinancing, and they can be paid off whenever the borrower wants, he said.
 
The banks do not anticipate that rising mortgage rates will have a destabilizing effect, even though they do increase the risk of default. The Bank of Israel is aware of that risk, and therefore, took steps to limit variable-rate mortgages, Meizlik said.
In addition, banks were instructed to make customers aware of the risks, and when approving loans, they verified that borrowers could pay even if interest rates were to increase, Meizlik said.
 
This story is by: Eran Azran, TheMarker, Ha’aretz. January 26, 2011
 
Ministry changes lanes on road signs
Updated signs indicate traffic flow, tunnels and new rules on legal U-turns.
 
The Transportation Ministry has released a chart of new road signs it plans on installing across the country. The new slate of signs will replace the ones currently in place since 1970 and last updated in 2002.
 
The new signs were published on the ministry’s website and are in accordance with the Vienna Convention on Road Traffic, which establishes uniform signs worldwide. The chart of new signs is more extensive than its predecessor and has 10 parts instead of six but the signs are supposed to be simpler and clearer.
 
Among the innovations in the chart are signs and road markings explicitly depicting a U-turn.
 
Until now, a U-turn has been permissible if there is no sign prohibiting it. Now, a U-turn is prohibited unless a sign says otherwise. Other innovations are a sign indicating a tunnel and a new road marking of small arrows along the broken line before one lane merges with another.
 
Also on the chart are graphic symbols for junctions and intersections of various sorts, replacing the words “Junction” or “Intersection.”
 
The use of old signs indicating airplane noise or prohibiting the use of the horn will be discontinued. Altogether there are now 257 signs as compared to 188 on the old chart.
 
Councils given instructions
The new signs will be integrated into driving lessons and the preparations for the theory tests as well as in refresher courses. The Transpiration Ministry has also published instructions to the local authorities in Israel about the way the signs should be placed.
 
On a number of roads the speed limit signs have been replaced recently, after it was increased slightly.
Another recent move by Transportation Minister Yisrael Katz, to hebraize all place names on signs, no matter the language they are written in, has earned him scathing criticism and charges of politicization.
 
The first driving theory test incorporating the new signs will be held on April 1. The questions and answers on the test will be taken from a stock of about 1,800 questions that have been updated and rewritten by a professional committee Katz appointed.
 
The minister has instructed the License Bureau to publish the stock of theory test questions and answers on the Transportation Ministry website and to enable driving students to enter the bank of questions for free. Until now the question bank was accessible only with purchase as a book costing NIS 85.
 
By Daniel Schmil, Ha’aretz. January 30, 2011  
Health Ministry moves to reduce red tape for immigrant docs, paramedics
Some licensing tests to be in English
 
The Health Ministry announced plans this week to ease the licensing process for new immigrants, including allowing doctors to apply for a medical license before they physically relocate and translating into English a licensing exam for paramedical professionals.
 
The move comes after MK Yoel Hasson demanded the ministry fire the director of its medical licensing department − who is accused of impeding the absorption of immigrant physicians by creating an unwieldy bureaucracy − or face a state investigation, as reported in Anglo File three weeks ago.
 
Immigrant organizations welcomed the ministry’s efforts, expressing confidence that their continuous criticism of the licensing process for newcomers is finally being taken seriously.
 
“We decided to allow an English examination for health professionals,” a ministry spokesperson told Anglo File this week about the licensing test, which until now has only been available in Hebrew. According to a 2008 decision, immigrant paramedics who finished their studies after 2009 would have to pass a licensing test before being allowed to practice in Israel, explained Lizi Martin, a counselor for immigration assistance group Nefesh B’Nefesh.
 
The ministry would not expand regarding specifics, but Martin said that at a meeting Sunday involving the ministry’s director-general, Roni Gamzu, officials promised to translate into English the tests for occupational and physical therapists and dietitians. Exams for speech therapists will not be translated, as officials felt a strong command of Hebrew is “vital” to their jobs, she added.
 
The ministry also pledged a pilot project allowing immigrant doctors to start applying for medical licenses as soon as the Jewish Agency confirms their eligibility for aliyah. Currently, doctors can only apply after they have concluded the immigration process and landed in Israel, a fact that keeps them uncertain about their status and in many cases forces them to live unemployed in Israel for several months.
 
The ministry committed to meeting with immigration assistance groups every three months to work on easing the licensing process for newcomers. In addition, the ministry told Anglo File that it has decided to create a “communication channel” through which the organizations can discuss urgent cases with ministry officials between these meetings.
 
Complaining about a ‘cruel bureaucracy’
 
For years, immigrant groups have complained that newcomers had no way of inquiring about the status of their application, often having to wait for weeks for a response.
 
Earlier this month, Hasson, who heads the Knesset Lobby for the Encouragement for Aliyah from the West and the State Control Committee, blamed the director of the Health Ministry’s medical licensing department, Dr. Amir Shanon, for the “cruel bureaucracy” that allegedly stands in the way of immigrant doctors. Following a meeting of the Knesset’s Committee for Immigration, Absorption and Diaspora, Hasson gave the ministry a two-month ultimatum, saying, “If we don’t see things changing by then, I will call on the state comptroller to investigate the ways Dr. Shanon works.”
 
A ministry spokesperson this week rejected Anglo File requests to interview Shanon and Gamzu. Instead, she said the ministry “rejects the criticism and focuses on actions.” Several professionals assisting immigrants told Anglo File they are encouraged by the ministry’s initiatives.
 
“We have been talking to the ministry for so many years about making changes to the licensing process, but all we got to hear was, ‘That’s the way it is, we can’t do anything about it, thank you, goodbye.’ The meeting on Sunday was the first time in years that we felt somebody is really trying to help improve the situation for immigrant doctors and medical professionals,” said Esther Blum, of the Council of Immigrant Associations in Israel.
 
“It was the most positive meeting we had in a long time − they really tried to help us,” NBN’s Martin agreed. “We all came out of this week’s meeting feeling very optimistic.”
 
Nefesh B’Nefesh’s executive vice president, Danny Oberman, credited Gamzu − who took the director-general’s post in the spring of 2010 − for bringing fresh wind into the ministry.
 
“There appears to be a willingness on the part of the Health Ministry under the new director-general to address the issues directly and to see if better solutions can be found, processes be eased or unnecessary bureaucracy removed. He’s definitely a partner in dialogue,” Oberman told Anglo File this week. “But it’s too early to measure success. We’ll know more in a few months.”
 
 
Your Taxes: Tax changes for new olim
    
Some advice for those having just made aliya.
 
There have been a few changes to the Israeli tax rules for new immigrants and returning residents.
The changes relate only to Israeli-source income.
 
What’s exempt?
 
The basic rule is unchanged. If you become a new Israeli resident, the country grants you a 10-year
tax holiday (exemption) – BUT only for non-Israeli-source income and capital gains.
 
This applies to new residents who became resident on or after January 1, 2007. This also applies to senior
returning residents who resume Israeli residency after residing abroad at least 10 years.
 
Exempt income and related assets do not need to be reported to the Israel Tax Authority for the same 10 years.
All types of income and capital gains are covered by the exemption if they are derived from non-Israeli sources, such as income from salary, business, pensions, investments, etc. However, if you work in Israel for anyone at all, you generate Israeli-source income and you will pay Israeli tax from day one.
 
New tax credit for returnees
 
 The recently reported proposals regarding credit points have just been enacted. In 2011 each credit point
reduces the tax bill by NIS 209 per month. In the case of a married working couple, the husband usually
receives 2.25 credit points and the wife usually receives 2.75 points.
 
But olim get more in their first 3.5 years in Israel: three more credit points for 18 months, followed by two more
credit points for 12 months, followed by one extra credit point for 12 months.
 
Until recently, the extra credit points only applied to someone who holds a Teudat Oleh (immigration certificate)
under the Law of Return, or someone eligible for this with a temporary resident’s visa.
 
Now “returning residents” will also get the extra credit points according to Amendment 181 to the
Income Tax Ordinance, commencing January 1, 2011. This applies to people who return to reside in Israel
between May 16, 2010, and September 30, 2012, after living abroad six years continuously. This can be
confirmed in a Returning Resident Certificate from the Immigration Absorption Ministry.
 
• Comment: Unfortunately, this tax saving for living and working in Israel is not big enough to encourage
people to get up and make aliya.
 
Exemption for ‘Privileged Residents’
 
The newly enacted Economic Policy for 2011 and 2012 (Legislative Amendments) Law includes a new
exemption for people classified as “Privileged Resident.” This refers to someone who first becomes an
Israeli resident in the years 2011-2015, or who returns to reside in Israel in those years after residing
outside Israel six consecutive years.
 
If a non-Israeli resident is invited to live and work at a recognized Israeli academic institution or hospital,
that individual will now be exempt from Israeli tax on royalty income received from an “application
company” belonging to that institution for five years starting in the year such income is first received.
This applies commencing January 1, 2011, subject to various conditions, as discussed below.
 
An application company is a subsidiary of an academic institution or hospital that engages in
the development of products discovered or developed by the institution or hospital. The individual
must enter into an agreement with the applications company within two years after the end of the
year in which he/she moved or returned to live in Israel. And tax avoidance must not be a motive!
The agreement should relate to the development of a product in consideration for, among other things,
royalties for the usage of the product.
 
The product should be a tangible or intangible derived from research and development according to a
plan approved by the Chief Scientist’s Office under the Industrial R&D Encouragement Law.
 
Note that the above exemption only applies to the portion of such royalties paid to the applications
company by a foreign resident that does not have a “permanent establishment” in Israel. A
 permanent establishment is not defined here, but it is usually taken to mean a fixed place of business.
 
• Comment: Unfortunately, this looks like an exemption for a privileged few? As always, consult
experienced tax advisers in each country at an early stage in specific cases.
 
By Leon Harris, February 2, 2011
 
Leon Harris is a certified public accountant and tax specialist at Harris Consulting & Tax Ltd.
 
 
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