Severance Pay for Relocation: How to Resign and Get Your Entitlements in Israel

The Essence

Resigning from a job due to relocation to a new place of residence may entitle you to full severance pay (pitzuim), as if you were dismissed by your employer. This is an exception to the general rule, designed to protect employees for whom the daily commute has become unfeasible due to a change of address. The amount of severance pay is typically one month's salary for each year of employment.

Who is Eligible?

To qualify for pitzuim upon resignation due to relocation, you must meet the following criteria:

• You have worked for the same employer or at the same workplace for at least one full year.
• You are relocating to a new place of residence within Israel.
• The distance between your new home and your workplace has increased significantly, making the daily commute impractical. The law establishes a specific minimum distance (a threshold of 40 km is often cited), but this must be verified at the time of resignation.
• There is a valid reason for the move (e.g., moving to join a spouse who has changed jobs, or relocating to a city designated as a "development area").

Who is NOT eligible (common misconceptions):

• An individual who has moved a short distance that does not significantly affect commute time.
• An individual who cannot provide proof of a change of address (e.g., a rental agreement).
• An individual who did not state relocation as the primary reason in their resignation notice.

Your Rights

The primary right is to receive full severance pay.

• Payment Amount: One final gross monthly salary for each year of employment with the given employer.
• Part-time Employment and Incomplete Year: The calculation is made proportionally to your employment rate and the time worked.
• What is Included in the Salary for Calculation: The calculation base typically includes the basic salary, permanent allowances, and commissions. The exact components should be verified in your employment contract.

Example Calculation:

Step-by-Step Guide

1. Verify Eligibility. Ensure your relocation meets the legal requirements, especially regarding the distance. If you are unsure, consult with a lawyer or the Department of Labor Relations.
2. Write a Resignation Notice Letter. This is the most critical step. In the letter (מכתב התפטרות), you must clearly state that the reason for your resignation is relocation to a new place of residence (מעבר דירה). Specify your last day of work.
3. Adhere to the Prior Notice Period. You are required to give your employer advance notice (הודעה מוקדמת). The notice period depends on your length of service and is typically up to 30 days.
4. Submit the Letter and Supporting Documents. Hand the letter to your employer and attach a copy of the new rental agreement or another document confirming your new address.
5. Obtain "Form 161". After your last day of work, the employer is obligated to provide you with Form 161, which is necessary for releasing your pension savings and pitzuim.
6. Contact the Pension Fund. With Form 161, you apply to your pension company to receive the funds. If you have "Section 14" (see below), the process is significantly simplified.
7. If the Employer Refuses: In case of refusal to pay or issue documents, you have the right to file a claim with the Labor Court (בית הדין לעבודה).

Document Checklist

Gather this set of documents to avoid delays.

• Identity Card (Teudat Zehut).
• Resignation letter clearly stating the reason (relocation).
• Copy of the rental agreement for the new address (חוזה שכירות).
• Copy of the rental agreement or a utility bill from the old address (to confirm the fact of relocation).
• Recent payslips (tlushei maskoret).
• Form 161 from the employer (obtained after resignation).

Potential Pitfalls

• Wording in the Resignation Letter. It is critically important to specify relocation as the reason. If you write "for personal reasons," you automatically forfeit your right to pitzuim on this basis.
• "Section 14" (סעיף 14). Check your employment contract for this clause. If it is present, it means that the employer has been making monthly contributions for pitzuim to your pension fund. In this case, you will receive this money regardless of the type of termination, and the process will be simpler. However, if this clause is absent, you are dependent on the employer's decision to pay the severance.
• Taxes. Severance pay is tax-exempt up to a certain ceiling (the amount changes annually). Anything above this amount is subject to tax. Check the current ceiling on the Tax Authority's website.
• Proof. Do not resign until you have a signed rental or purchase agreement for the new address in hand. Without proof, your claims will be unsubstantiated.

Contacts and Links

To ensure accuracy, we do not provide direct links as they may change. Use the following search queries to obtain the most up-to-date information from official websites:

• For detailed information: Search on Google for כל זכות פיצויי פיטורין עקב מעבר דירה. The "Kol Zchut" website is a reliable source of information on citizens' rights.
• Official Body: Ministry of Labor, Social Affairs and Social Services (משרד העבודה והרווחה). Information on labor rights can be found on their website.
• Consultations: You can seek free legal advice from organizations that assist new immigrants or at legal clinics at university law faculties.

Dictionary

• Pitzuei Piturin (פיצויי פיטורין) — Severance pay (pitzuim).
• Hitpatrut be'din Mefutar (התפטרות בדין מפוטר) — A resignation that is legally considered a dismissal. This is the legal term describing your situation.
• Ma'avar Dira (מעבר דירה) — Relocation, change of residence.
• Michtav Hitpatrut (מכתב התפטרות) — Resignation letter.
• Hoda'a Mukdemet (הודעה מוקדמת) — Prior notice of resignation.
• Se'if Arba-Esre (סעיף 14) — Section 14 of the Severance Pay Law, which regulates the deposit of pitzuim into a pension fund.