Rights9/23/2026

Israel Launches NIS 35 Million Pilot to Compensate Victims of Protection Rackets

Israel's Ministry of Finance is launching a temporary mechanism to compensate business owners and farmers whose property was damaged after they refused to pay extortionists. The pilot is intended to operate for about two months and will apply to direct property damage not covered by insurance.

Key facts

•Pilot budget: NIS 35 million
•Initial operating period: about two months
•Administering body: Property Tax Compensation Fund
•Condition: an official police complaint
•Coverage: direct, uninsured property damage
•Approved by the government in late June

Who the New Program Will Protect

Business owners and farmers whose property was damaged by extortionists because they refused to pay for fictitious security services will be able to apply for payment. The mechanism is intended for victims who do not have insurance coverage for damage of this kind. Payments will be administered by the Property Tax Compensation Fund at the Israel Tax Authority, based on the model used to compensate victims of hostile acts.

The Main Condition for Receiving Payment

The principal prerequisite will be filing an official police complaint about the extortion and the resulting damage. The state intends to compensate direct property damage caused as a result of the collection of protection money. The source does not specify additional criteria or the amounts of individual payments.

How the Pilot Was Approved

The government approved the initiative in late June. Three months later, the Ministry of Finance published the final procedure for its implementation after reviewing public comments. NIS 35 million was allocated for the trial period, and its effectiveness will be assessed according to its assistance to law enforcement authorities and its impact on security in the business environment.

Why the Compensation Program Was Introduced

The program aims to help businesses continue operating after an attack and reduce the pressure forcing them to pay criminal organizations. The authorities also hope to encourage victims to contact law enforcement authorities. According to data from the State Comptroller's April 2026 report, cited by Ynet and based on a survey by the Contractors and Builders Association in the Tel Aviv and Central District, 87% of contractors in the country were forced to pay protection money.

What this means for you

A business owner or farmer whose property was damaged by extortionists after refusing to pay will be able to claim compensation from the state if the damage is not covered by insurance. To participate, it will be necessary to officially report both the collection of protection money and the resulting damage to the police. At this stage, this is a temporary pilot, so the mechanism's continued operation will depend on an assessment of its results.

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