Deposit Fund Law for Asylum Seekers

In May 2017, the “Deposit Fund” Law (section 4 of the Infiltration Prevention Law) came into force. The intention of this law is to make it more difficult to employ asylum seekers and to apply a rigid mechanism of economic pressure to force them to leave Israel. According to this law, employers in Israel must deduct 20% from the salary of asylum seekers and deposit this money in a designated fund. This is in addition to 16% deposited by the employer. According to the provisions of the law, the money in the deposit fund can be received by asylum seekers only when they leave Israel.

The goal of deducting one-fifth of the salaries of asylum seekers was to create distress among them – to starve, weaken and discourage them until they agree to leave the State of Israel “voluntarily”. Since this law came into force, asylum seekers, who are among the most vulnerable communities in Israel, have been robbed of 20% of their monthly salary. The price was also paid by their children, families, and other disadvantaged people.

The ASASF staff witnessed the economic deterioration and human distress brought about by the Deposit Law. We have seen a dramatic increase in the number of asylum seekers asking for assistance in buying food, diapers, and other necessities. We have received numerous reports of hunger among this community. We have documented increasing overcrowding in residential apartments and families afraid of being thrown into the street. Community support networks are collapsing as it becomes increasingly difficult for people to help the weaker members of their community. We have helped women who were forced to work in prostitution. We have seen parents working day and night to make a living, their children left alone or in unsafe settings. Health conditions are deteriorating, there has been an increase in exploitative employment, and deteriorating working conditions – all as a result of the Deposit Law.

In March 2017, we joined a petition to the Israel High Court led by Kav LaOved (Workers’ Hotline) against the Deposit Law, along with other organizations. Additionally, the petition was joined by 11 Israeli organizations working on behalf of women and children in Israel as “friends of the court” (amicus curiae), expressing their clear position against the law. The petition noted that the Supreme Court previously ruled that the government’s attempts to encourage the departure of asylum seekers were invalid, and warned of the serious consequences of the Deposit Law.

Alongside this legal work, we have also fought against the Deposit Law in the public arena and before the various state authorities. In July 2018, we published a report summarizing the serious effects of the Deposit Law on asylum seekers in the first year after it came into force. As part of a legal proceeding in the Israel High Court demanding that the law be repealed, the State informed the High Court that it would do what it had previously refused to do; namely, they would create regulations for exemptions for “humanitarian cases”.

Regulations passed on June 27, 2018 reduced the deposit payment from 20% to 6% for certain populations (women, men over 60, victims of trafficking, minors and those who can prove they have a health condition). However, they ignored the main breadwinners in the community – men – including those supporting families and other weak members of the community.

In March 2020, when the Coronavirus crisis broke out, many asylum seekers lost their livelihoods. Following the economic collapse of the community of asylum seekers, ASSAF and other human rights organizations, demanded that they be allowed to use the money in the deposit fund as emergency assistance. The government began a legislative process to allow asylum seekers to receive about NIS 2,700 a month from the deposit fund. For weeks, the government delayed approving this move, and initiated an amendment to the original proposal, according to which this small monthly amount would be given only as a loan.

While the state was dragging its feet on the issue of using the deposit fund for assistance, on April 23, 2020, the Supreme Court ruled on the petition filed against the Deposit Law three years earlier. By a majority of six judges to one, the Israel High Court judges ruled that the Deposit Law is unconstitutional and disproportionate to achieving its primary goal of encouraging asylum seekers to leave Israel. The court overturned the order to deduct 20% of workers’ salaries to the deposit fund. It ordered the state to return the funds accumulated in their deposit accounts to asylum seekers within 30 days.

Human rights organizations are continuing to address the issue of “lost funds” – money that was deducted from workers’ salaries but never deposited into deposit accounts, an amount estimated at hundreds of millions of NIS.