The Coming Home Crisis – Guide to Repatriation

Coming Home Crisis-How to have a Successful Homecoming

Return from a long relocation period is often accompanied by feelings of disappointment and difficulty fitting in the environment and the workplace. What are the reasons for that and what can be done to facilitate a smoother integration back home?


Many Israelis returning to Israel after a period of overseas relocation note a sense of crisis and severe adjustment problems (repatriation) – even more than when leaving. This is seemingly an inexplicable phenomenon – why would it be difficult to return to your homeland, your family, your friends and your language? A closer look at the phenomenon reveals a number of reasons:


Subsistence level: many Israelis improve their standard of living abroad (higher quality housing, international schools, high wage levels, nanny at home, etc.), as all of us know, it is easy to adjust to improved standards of living – but very difficult to adapt to the contrary.


Quality of life and lifestyle: Many Israelis adapt to the quality and style of life abroad (calmer pace of life, formal manners, maintaining personal space, etc.). Returning to the “seething cauldron” that is Israel can be a challenge.


False expectations: employees returning to Israel don’t prepare themselves for the return and come with unrealistic expectations of reintegrating in it, which could lead to a crisis.


Leaving their place of work


Repatriation crisis is reflected among other things, in the high dropout rate of returning Israelis from their workplace. About 35% of employees who work abroad on behalf of the Israeli company resign their jobs during the first two years of their return to Israel. There are a number of reasons for that:


Disappointment with the company: Some employees (and many times even their spouses) were not satisfied with the way the company handled them during their stay abroad. While abroad they had no real ability to leave the company (most work permits do not allow workers to work for another company abroad). Back in Israel there isn’t any restriction on resigning, and at the first opportunity employees will choose to get back at the company and leave it.


Wage cuts: returning to Israel usually involves a decrease in the level of wages, which workers find difficult to adapt to, and this motivates them to actively look for another job.


Status decrease: oftentimes the employee discovers that while he was abroad, the personnel at the Israeli company changed and don’t recognize his abilities and “historical rights”.


Expectation of promotion: the returning worker expects a promotion at the organization, in recognition of the experience he gained abroad, but upon his return to Israel he finds that “out of sight out of mind” and that all the senior or desirable positions are already taken.


To facilitate the process of reintegration, it is important to consider several areas which, when handled properly, will contribute to a pleasanter integration after relocation.


The regulation of insurance and pensions – in advance


Pension insurance: an Israeli who received appropriate advice prior to leaving Israel retained the framework of his pension insurance (disability insurance and life insurance) and therefore can continue with them easily when he returns to Israel. An Israeli who didn’t retain his pension insurance framework in Israel may find himself in a bind when he returns to Israel, if there are any changes in his medical condition. In any case, it is recommended to treat pension insurance immediately and try and keep the parallel foreign policies while the matter is not regulated in Israel.


Pension Savings: Israelis neglect the issue of their pension savings overseas. This is a serious mistake, since most of them are in the most significant period in terms of provisions for pension savings. Others contribute to foreign pension plans, but do not take the actions required to preserve the pension rights abroad when returning to Israel. It is advised for returning Israelis to seek professional actuarial advice (to check the status of their pension savings) and international benefits consulting (to check the ability to benefit from the pension contributions made abroad).


Social Security: upon your return to Israel you should contact the relevant branch of the National Insurance Institute of Israel and check the National Insurance benefit entitlement (child allowance, alimony, disability allowance, etc.). You might also want to check whether National Insurance benefits were paid while your stay abroad. In most cases, a person who stays abroad for more than three months loses his rights for benefits. If you were paid allowances during this period – it is better to inform the National Insurance Institute of Israel and arrange the repayment of the debt as soon as possible. In our experience, sooner or later the National Insurance Institute of Israel will track down the debt (no statute of limitations on debt) and the more the payment of the debt is delayed the more the amount to be repaid inflates (which includes fines and interest fees).


Health Insurance: Israelis who didn’t pay National Insurance continuity and national health insurance while abroad are likely to be subject to a waiting period of two months for each year of separation. However, it is possible to “purchase” the waiting period sixmonths before returning to Israel by paying a fine of NIS 10,000 or to purchase private medical insurance for the waiting period. HMOs also require a waiting period for those who didn’t preserve their supplementary medical insurance. It is recommended to examine the status of health insurance in Israel for at least six months before returning to Israel. As is the case with pension insurance, it is important to

retain the overseas medical insurance policy as long as the issue is not resolved in Israel.


Tax reliefs and other issues concerning the returning employees


Income Tax: An Israeli who lived abroad for more than six years is entitled to tax reliefs and exemptions on assets purchased abroad before returning to Israel. An Israeli who lived abroad for over ten years also qualifies for tax exemptions in respect to income from work abroad. It is important to keep in mind that an Israeli who is considered a resident of Israel during his stay abroad may be subject to taxation in Israel for overseas income. Therefore, it is recommended to perform tax planning using a professional consultant some months before returning to Israel.


Customs: An Israeli returning to Israel after a period of two to six years abroad will be entitled to exemption from customs on “necessary” furniture, household and electrical goods. An Israeli who lived abroad for more than six years will also be entitled to full exemption on the products that he brings to Israel (the same as a new immigrant) excluding vehicles. A business owner who brings professional equipment necessary for the operation of the business to Israel will be required to deposit a bank guarantee equal to the customs duty for the equipment until he produces evidence of using the equipment in a business he set up in Israel.


Returning Resident Rights by the Ministry of Immigrant Absorption: the Ministry of Immigrant Absorption provides a basket of benefits for returning residents (Israelis who stayed abroad for more than two years). Among the benefits granted are:

  •  Discounted ticket (one-way)
  •  Assured income (for those who can’t find work)
  •  Vocational training courses
  •  Assistance in obtaining a professional license
  •  Financing of salaries for six months


Housing: It’s better to rent and not buy


Many Israelis invest time and resources in purchasing a home when returning to Israel. In our experience, “less is more” – buying a home requires much time and resources at a time when the family is under considerable pressure. In addition, the real estate market in Israel changes rapidly and Israelis absent from the country for several years lack critical knowledge for preventing errors.


In many cases we spend months escorting returning Israelis who insist on buying a home , until they face reality and recognize the many difficulties. It is therefore advisable to “make do” with renting a house in the first stage (at least a year). The renting period will allow the returning employee and his family to learn more about the local real estate market and will enable a more relaxed purchase.