Work accident for the self-employed: A guide that could save you tens of thousands of shekels

A self-employed person who gets the flu will not receive payment for their sick days; this is almost an axiom in the world of the self-employed. But precisely in the case of a work accident, a window of opportunity opens that many do not know about or do not know how to utilize correctly. We spoke with attorney Tali Dayan about what every self-employed person must know before they find themselves injured and helpless in front of the National Insurance Institute.

Why is there a distinction between a work accident for an employee and one for a self-employed person?

First of all, the self-employed person is subject to an increased burden of proof compared to an employee. The National Insurance Institute does not necessarily 'not believe', but in practice, it tends to believe the self-employed less. The reason is that an employee usually has confirmation from the employer that they were indeed working or on their way to work, whereas with the self-employed, we see many more investigations.

Usually, the self-employed person will be summoned for an investigation by an investigator on behalf of the National Insurance Institute to ensure that the accident is truly related to work.

Beyond that, many self-employed people underestimate the possibility of receiving compensation in advance. They tell themselves, "I'm not entitled to sick days anyway, so I won't use them," and go to work without requesting a sick note from the HMO (Kupat Cholim). Thus, many miss out on injury benefits, up to 91 days during which the National Insurance Institute does pay the self-employed.

This is one of the few times when a self-employed person can actually receive payment for a period of incapacity. If a self-employed person is sick with the flu, no one will pay them for sick days, but in a work accident, there is an option to receive injury benefits for up to three months.

The most important thing is the initial documentation of the event close to the time it occurred. Unlike an employee, who has an employer and an organized welfare system behind them, the self-employed person bears sole responsibility for dealing with medical and insurance entities. For this reason, many self-employed people rush to return to work, avoid seeking medical treatment immediately after the accident, do not request a sick note from their family doctor, and continue to function while ignoring the injury.

Only after long months, when their condition worsens, do they turn to treatment for the first time, and then they no longer have an exact date or documentation of a specific event, which makes it very difficult to prove the link between the injury and work in retrospect. In contrast, when medical documentation is done in real-time, close to the time of the event, it is much easier to file the claim properly and establish the argument that it is an injury that occurred at work, on the way to it, or during the course of the occupation.

Combining statuses: Self-employed and employee

First, it must be determined where exactly the accident occurred, whether within the framework of the occupation as a self-employed person or within the framework of employment as an employee, as the distinction between the two is significant. On the self-employed side, compliance with threshold conditions is required: work in a volume of at least 20 hours per week on average, and an income of at least 50% of the average wage in the economy. Alongside this, there is an alternative condition of at least 12 hours per week. In any case, what is decisive is that the occupation be registered legally and fully regulated with payments to the National Insurance Institute.

The compensation is derived from the payments the self-employed person made to the National Insurance Institute, and in particular from those paid in the three months preceding the event. A self-employed person who did not meet the payments will encounter a real difficulty, as it is not possible to complete the payment in retrospect. Furthermore, the amount of compensation is determined based on what was actually paid only: even if the actual income was higher, and the self-employed person intended to complete the difference at the end of the year, the determining wage will remain based on the payment that was paid, and there is no possibility to correct it in retrospect. Therefore, many times it is better to pay advances slightly higher than the average annual estimate than lower, since if it turns out at the end of the year that the income was significantly higher, the insurance coverage will already be much lower than what is due.

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What is considered a work accident for a self-employed person?

The definition is similar in essence to that which applies to an employee. It concerns a traffic accident on the way to work or back from it, as well as an accident directly related to the occupation itself. A self-employed person who is injured on the way to the accountant for the purpose of reporting their income will be required to prove that the trip is related to the occupation or the management of the business. A self-employed person who is injured on the way to a new office they rented for business purposes will be required to show the connection between the office and business activity. And a lawyer who is injured on the way to a medical committee on behalf of a client will be required to prove that the event occurred while performing their duties.

In practice, the National Insurance Institute will send the self-employed person a questionnaire, and subsequently summon them for an investigation in which they will be questioned on every detail they provided in it. And here lies the main difficulty, as the decision often lies in the small details. It is enough for a self-employed person to have phrased a word or two in the form inaccurately, or to have become confused during the investigation, for the claim to be rejected and the event not to be recognized as a work accident. From there, the self-employed person is required to prove their claim in the Labor Court, and at this stage, many give up due to a lack of resources or strength. This is a regrettable result, as these are not insignificant funds paid to the National Insurance Institute every month, and when an injury occurs, it is appropriate to exhaust all rights.

What happens if the self-employed person did not pay National Insurance?

In such a case, their eligibility for compensation is denied. In the absence of payment on time and without insurance coverage, the self-employed person will not be entitled to compensation. Self-employed people who report an income much lower than their actual income will receive compensation that is low accordingly, which does not reflect the scale of their true activity. And those who did not report at all are left without an address to turn to, unless they purchased private insurance, but in my experience, those who do not pay National Insurance usually also avoid purchasing private coverage.

Common mistakes when filing a claim

The central failure lies in the medical documentation. Many injured people do not turn to medical treatment close to the time of the accident, and even in cases of significant injury, where an ambulance was called and the injured person was rushed to the hospital and examined, a gap of three to four months sometimes forms without any continuous medical documentation. Self-employed people tend to rush and return to work despite the pain and limitation, out of a perception that they have no one to claim compensation from, or out of fear that the business will collapse in their absence. As a result, a gap is created in the medical documentation, which makes it difficult to establish the causal link between the injury and the event.

To illustrate: a person who was injured, arrived by ambulance to the hospital and was examined, but after a week or two began to feel pain in the back. At the time of the examination in the emergency room, they did not mention this, because at that time only their ankle hurt. If they turn to the HMO after three months and link the pain in the back to the event, a disconnection will be created in the causal link, and it will be very difficult to establish the connection between the injury to the back and the accident. For this reason, I recommend turning to legal advice as close as possible to the time of the event, as this way the client can be instructed and directed to which medical entity to turn to and at what timing, in order to preserve the causal link.

Central advice: Protecting rights before an event

Pay the National Insurance contributions on time and monitor the insurance conduct on an ongoing basis. A check should be performed with the accountant once a quarter, and although accountants usually perform this audit on their own initiative, the final responsibility lies with the self-employed person as the business owner and the actual payer. Every three months, it is appropriate to examine if the income has risen, if the insurance coverage is adequate, and if an increase in advances to the National Insurance Institute is required to adjust the coverage to the actual income, without waiting for the end of the year and without accumulating debts.

*The information in this article is general only and does not constitute a substitute for professional legal advice. The article is in collaboration with Zap Mishpati.