Partial and false information about caregiving companies has caused journalists and MKs to object the new reform declaring elderly people as the sole employer of caregivers.

One week ago (June 24th, 2013), the Knesset Committee for Work and Welfare held a discussion regarding a reform in the Economic Arrangements Law, according to which elderly employers of migrant caregivers would receive cash benefits from the National Insurance Institute, instead of benefits in the form of services by Israeli caregivers. Until now, a caregiver’s salary was paid by two separate employers – a caregiving company and the elderly employer. The caregiving company paid according to the amount of hours the elderly person was entitled to by the National Insurance Institute, and the elderly person paid the difference. According to the new procedure, the employers would pay caregivers directly, making the elderly the sole employer of the caregiver.

The reform was announced in newspapers and magazines such as The Marker, Calcalist and Maariv, yet all of the articles highlighted the effect the change would have on elderly employers, with no mention of the potential effects on migrant workers directly influenced by the decision. The decision to have an entire sector – about 60,000 workers – employed directly by private individuals has enormous effects on daily life. Their perspective was not presented in any of the discussions (to read more about the lack of representation, please read the article by attorney Michal Tadjer, a Kav LaOved representative). In addition, although the articles present arguments describing the benefits of the reform for the elderly, these arguments originate from a misconception regarding the role of caregiving companies who provide benefits, the role of the manpower companies (to read more about the differences and illegalities regarding caregiving companies and manpower companies, please read the article by Idit Lebovitch, Coordinator for Caregivers at Kav LaOved), and the use of partial and false information.  Kav LaOved, representing and mediating between caregivers and employers, works to improve labor conditions as a whole, and therefore brings forth a set of counter-arguments to the misconceptions presented in recent articles.

One argument claims that the reform privatizes caregiving services, when in fact, it nationalizes them: the elderly person receives money directly from the National Insurance Institute and not via a private caregiving company. Additional National Insurance benefits are transferred the same way. It seems unbelievable that in order to receive unemployment allowance, we will have to be paid by a private company and not directly by the National Insurance Institute, especially while the private company takes a substantial part of the sum. So why should elderly benefits be any different?

The claim that elderly employers will find the new payment system too difficult is impossible in today’s system- the number of hours allocated by the National Insurance Institute is different for every benefiter. Elderly employers calculate the money they pay to their caregiver each month according to the amount the caregiving company pays per month. This creates much more confusion than paying a fixed sum each month. The claim that the employers will have difficulties without the company to assist them is also untrue. All employers are registered with a manpower company that assists them with the employment of the migrant caregiver, and will continue to receive assistance even after the benefit payment process is changed.

Today, the National Insurance Institute encourages benefiters to employ a migrant caregiver over an Israeli one. The maximum number of hours allocated to a highly handicapped elderly person is 22 hours if an Israeli caregiver is chosen (nursing services benefit), as opposed to 18 if the cash benefit is chosen and a migrant caregiver is employed. By allocating four additional hours to employers of Israeli caregivers, the state claims to encourage employment of Israeli caregivers over migrant caregivers. However, by restricting the maximum hours to 22 per week, the state is actually encouraging the elderly to employ migrant caregivers. For an elderly person in need of 8 hours of care a day, 40 hours per week, it is cheaper to hire a migrant caregiver 24/7 than pay an Israeli caregiver an additional 3-4 hours a day, even if an elderly person has no need for around-the-clock care.

Furthermore, most caregiving companies which transfer benefits are privately owned, profit earning businesses which take a substantial amount of the total sum given to them by the National Insurance Institute. The elderly person, or more correctly, the migrant caregiver, receives a sum much lower than the one the National Insurance Institute pays the benefiter. According to data published by the National Insurance Institute, an employer at 168% benefitting level who chooses to receive the cash benefit receives 2,848 NIS per month directly. Should that employer choose to receive the benefit via a caregiving company, the employed caregiver will receive payment for 18 weekly hours, which on average is 2,150 NIS per month, including all her social benefits. Keeping in mind that the sum paid to the employer is only 80% of the full benefit, the caregiving company is left with 1,400 NIS each month for every caregiver employed through it.

In conclusion, the government must continue to supervise payment of caregivers, under whatever payment system is decided upon, even if the elderly person becomes the sole employer. Since the state- via the National Insurance Institute- is in charge of paying some of the caregivers’ salary, it should also guarantee that the social benefits they are entitled, such as pension and severance. This can be done by making monthly deposits to a trust (should one be created) or by using the existing process- continuous deposits to an insurance company, under the “Bituah Prat” policy (directed by the National Insurance Institute). In addition, the state should provide caregivers factual and complete information, a kind of pay-slip, detailing the funds transferred to their employers in accordance with the Nursing Law, as well as the sums accumulating towards their severance and pension.

Several MKs are currently promoting a new reform in employment of migrant caregivers, to move away from the current system in which every caregiver has two employers (patient and caregiving company), who share salary and social benefit payments in an unstable and confusing manner. To prevent this situation in which the caregiver is vulnerable and likely to fall between the cracks, a new system is being proposed in which the caregiving company is the sole employer, under supervision and enforcement by the state authorities.