Kiryat Shmona asks High Court to extend war compensation window
The municipality argues state deadlines cut off support before local businesses fully recovered from evacuation.
By Christopher Singh ·
The Kiryat Shmona Municipality has petitioned the High Court of Justice to extend the period for which local businesses can receive war compensation. The city contends that the state stopped recognizing financial losses while residents were still struggling to rebuild their operations after evacuation.
Justice Ruth Ronnen issued an order on November 4 requiring the government and other respondents to submit a preliminary response by January 4, 2027. This procedural step does not rule on the merits of the municipality's claims or guarantee any financial payout.
The petition challenges two specific deadlines. It contests the March 1, 2025, end of eligibility for the "red track" compensation scheme, which covers proven losses for border-community businesses. It also disputes the June 30, 2025, cutoff for additional temporary compensation arrangements.
The municipality argues that allowing residents to return did not immediately restore the customer base, workforce, or income levels businesses relied upon. The city is seeking a special arrangement to repay compensation advances that businesses already used for wages, suppliers, and recovery costs.
Before the court filing, the Tax Authority rejected the municipality's demand. In a letter dated September 24, Amir Dahan, director of the Tax Authority's Compensation Fund, stated that eligibility depended on meeting legal conditions, such as a shutdown caused by military restrictions, rather than on a formal declaration that the war had ended.
The petition asks the court to recognize losses from October 7, 2023, until the government announces an end to fighting, or at least through December 31, 2026. Alternatively, the city seeks a fresh examination of the cutoff dates and eligibility during later periods of military restrictions. The central argument is that authorities set a uniform end date without adequately examining the specific conditions in Kiryat Shmona.
A January 2026 report by the Knesset Research and Information Center shows that active businesses in the city fell from 1,242 in July and August 2023 to 881 in the same months of 2024. The number recovered to 1,188 in 2025, which remains 4.3% below the prewar count. Total turnover rose to 860 million shekels in July and August 2025, compared with 778 million shekels in 2023 and 589 million shekels in 2024. The report noted that these citywide totals may mask deeper losses among small businesses.
