## Facts

- Israel’s legislature amended the National Health Law and raised the ceiling for payments of health taxes and assessments for national insurance.
- Before the amendment, the relevant tax/assessment was charged at the same rate only up to five times the national average salary.
- After the amendment, the same rate applied to income up to 10 times the national average salary.
- The change increased the payment obligation of higher-income individuals compared with moderate-income individuals.
- Lahav-Association of Independent Contractors and Businesses in Israel petitioned against the Attorney General, arguing that the amendment singled out higher earners by requiring higher payments without providing increased benefits through the health and insurance system.

## Issues

1. Whether raising the ceiling for health taxes and national-insurance assessments from 5× to 10× the national average salary—without increasing corresponding benefits—unlawfully discriminated against higher-income individuals.
2. Whether the Court should intervene in the Knesset’s design of financing arrangements for public health insurance and national insurance.

## Decision

- The High Court denied the petition and left the amendment in force.
- The Court accepted that the amendment imposed additional payments on higher-income individuals, but it did not treat the absence of matching additional benefits as making the scheme unlawful.
- The Court treated the challenged measure as part of the legislature’s authority to fund national health and insurance arrangements, including through redistributive funding choices.
- The Court declined to substitute its judgment for the legislature’s in setting contribution ceilings where the petition showed no clear legal defect requiring judicial invalidation.

## Legal Principles

- Public health insurance and national insurance funding may include redistributive elements; contributors are not always entitled to benefits that rise in direct proportion to their payments.
- Differential financial burdens based on income do not, by themselves, amount to unlawful discrimination; the key question is whether the differentiation rests on a relevant basis and serves a legitimate public aim.
- Courts generally show restraint when reviewing legislation that sets taxes, assessments, and contribution ceilings, intervening only where a clear legal violation is shown.

## Conclusion

The High Court upheld the amendment increasing the ceiling for health taxes and national-insurance assessments from five to 10 times the national average salary, rejecting the claim that higher earners were unlawfully discriminated against merely because their increased payments were not matched by increased benefits.


Lahav-Association of Independent Contractors and Businesses in Israel v. Attorney General, HCJ 6304/09 (2010)