Tax Exemption (Ptor Mi Mas): Disability Benefits

Essence

An income tax exemption (Ptor mi mas) is a full exemption from paying income tax for individuals who have been determined to have a permanent medical disability of a certain degree. This exemption applies to income up to a legally established annual "ceiling" and is designed to alleviate the financial burden on individuals with serious health conditions.

Who is eligible?

Eligibility for the exemption is determined by a set of criteria. You may qualify for the exemption if:

You have been determined to have a medical disability of 90% or higher for a combination of conditions, or 100% for a single condition.
The disability is defined as permanent (for a period of 185 days or more).
The disability determination was made by an authorized body, most commonly the Bituach Leumi (National Insurance Institute).
You are a resident of Israel and pay income tax.

Who is NOT eligible:

Individuals with a temporary disability (less than 185 days).
Individuals whose medical disability percentage is below the established threshold.
Individuals with no taxable income.

Your Rights

The primary right is a full exemption from paying income tax (Mas Hachnasa) on your income from all sources (salary, business, pension, interest on deposits) up to a specific annual limit.

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Right	Description
Tax Exemption	A zero income tax rate on income up to the annual "ceiling".
Retroactive Refund	The ability to receive a refund for taxes paid in previous years (up to 6 years back) if the right to the exemption existed but was not exercised.

Important: The annual income "ceiling" for tax exemption is updated yearly. It is necessary to check the current amount on the Tax Authority's website.

Step-by-Step Guide

Determination of Disability Percentage. This is the first and most crucial step. Contact Bituach Leumi to determine your general medical disability (נכות כללית). This requires gathering all medical documents and undergoing a medical committee review (Va'ada Refuit).
Obtaining the Committee's Protocol. After the review, you will receive an official protocol stating the percentage and duration of the disability. Ensure that the disability is established for a period of at least 185 days.
Submitting an Application to the Tax Authority (Mas Hachnasa). Complete the specific form (Form 1516 - "Application for Tax Exemption Due to Disability").
Attaching Documents. Attach a copy of the medical committee's protocol from Bituach Leumi and other required documents to the application. The application can be submitted online through your personal account on the Tax Authority's website or at your local branch office.
Receiving Confirmation. After reviewing your case, the Tax Authority will issue an official approval (ishur) for the tax exemption. This document must be provided to your employer or accounting department to cease tax withholding.

List of Documents

Identity Card (Teudat Zehut) + appendix (sefach).
Protocol from the Bituach Leumi medical committee, confirming the disability percentage and duration.
Completed Form 1516 ("בקשה לפטור ממס הכנסה").
If applying for a retroactive refund: annual salary reports (Tofes 106) for the relevant years.
Bank account details for a potential tax refund.

Pitfalls

Difference Between Medical and Functional Disability. For the tax exemption, it is the medical disability percentage (נכות רפואית) that is relevant, not the percentage of loss of work capacity.
Validity Period. The exemption is granted for the period specified in the medical committee's decision. If the disability is not permanent for life, the procedure will need to be repeated.
The Exemption is Not Automatic. You are required to submit an application to the Tax Authority yourself. Bituach Leumi does not automatically transfer this data.
Retroactive Refund is Limited. You can request a tax refund for no more than the 6 years preceding the year of application. Do not delay submitting your documents.
Keep All Copies. Always make copies of all submitted documents and received approvals.

Contacts and Links

As official links and phone numbers change frequently, it is recommended to search for them directly on the official websites to obtain the most current information.

Israel Tax Authority: Search Google for רשות המסים בישראל.
National Insurance Institute: Search Google for המוסד לביטוח לאומי.

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