Summary: The Israeli Supreme Court ruled that yeshiva students who do not hold a valid military exemption—or have not formalized their legal status—will no longer qualify for discounts on National Insurance contributions. This benefit, costing the state around 100 million shekels per year, will be eliminated following an upcoming adjustment period.
Key Details:
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The court accepted the argument of the civil movement “Free Israel” (ישראל חופשית) that, since the expiration of the draft-exemption agreement more than two years ago, there is no legal basis to continue this discount. The benefit effectively subsidized non-military service in favor of Torah study.
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The exemption represented roughly a 67% discount from standard National Insurance payments—over 1,000 shekels annually per yeshiva student—amounting to approximately 100 million shekels per year.
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The petition argued that continuing the benefit without legal authority violates the principle of equality, as the state cannot financially encourage draft evasion. Therefore, the law should only apply to those legally exempt from service.
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The state responded by requesting a grace period for implementation. However, critics argue not only that such a period is unnecessary, but that the new rule should apply retroactively, with the National Insurance Institute collecting the full difference from past discounted payments.
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For context on contributions: at the time of the petition, the standard monthly National Insurance payment was 87 shekels, rising later to 130 shekels. Yeshiva students were paying just a third—29 shekels—though that figure later increased to 43 shekels.
