The substantial cuts in National Insurance Institute child allotments, which
went into effect on Tuesday, are a painful but necessary step on the road to the
country’s economic recovery and future health.
The cuts – part of the
government’s program and to slash the budget and jump start the economy by
saving NIS 2.75 billion a year – are not cosmetic. Families with children born
after June 1, 2003, will receive a flat NIS 140 for each child. For children
born before previously, the payment for the first two remains the same, but
families with three children born before the deadline will receive NIS 172 per
child, and increase proportionally.
In practice, a family with three
children ages three, five and seven who had been receiving NIS 701 will now
receive NIS 420. In the haredi and Arab sectors, where larger families are more
prevalent, the cuts will be felt even more. A family with seven children aged
three, four, eight, 11, 12, 14 and 17 who had received NIS 1,894 will now
receive NIS 1,208.
The history of child allotments in Israel has been one
of adjustments and changes since it was introduced in 1959 in an attempt to
address the already pressing issue of poverty.
During the mid-1980s,
various restrictions and requirements were introduced taking away child
allotments for most families and focusing on helping the Arab sector.
by 1992, the child allotment program for all children was reintroduced for good,
with various increases and cuts along the way.
Finance Minister Yair
Lapid – the mastermind of budget cuts that will impact the defense and education
budgets as well as various ministries and public sector employees’ wages and
benefits – is insisting that the child allotment cuts will end a cycle of
poverty for families who have gotten used to relying on the benefits to
supplement their low wages.
“There is only one thing that allows families
to get out of the cycle of poverty – work. The poverty rate in families with two
working parents is under 5 percent. This is the meaning of parental
responsibility and social responsibility,” he wrote on his Facebook page over
According to a 2008 study by the Bank of Israel and the
National Insurance Institute, there was a correlation between an increase in
child allotments and an increase in birthrates among the Arab and haredi
sectors. The study says the decision in 2004 to grant a monthly allotment of NIS
500 for a family’s fourth child and NIS 560 for a family’s seventh child
increased the birthrate in the Arab sector by 6%-7%, and caused a 3% rise in the
birthrate in the haredi sector compared to a period in which no child allotments
Whether or not the extra income from child allotments
results in more babies, it’s clear that the cuts will force parents who are
currently not working to search for employment.
The current child
allotments represent a significant percentage of some large families’ monthly
budget, and it will certainly be a crushing blow to their ability to make ends
However, Labor leader Shelly Yacimovich pointed out in opposing the
cuts that, according to recent studies, 65% of families labeled “poor” are
actually working families, although it’s unclear how many of those families are
one-parent families or families with both parents working.
of course, remains how the affected families will cope with having less monthly
income. As we pointed out in Tuesday’s editorial, Israelis are increasingly
finding it difficult to impossible to “finish the month.”
We pay more for
apartments and cars than our OECD counterparts, and prices in general have
increased while wages have not.
In a humane society, it’s incumbent on
the government to bolster the weaker sectors. But at the same time, as Lapid has
stated, people should not get used to “handouts” as the solution to their
He promised that the government will provide
assistance to families affected by the cuts by setting aside “hundreds of
millions [of shekels] to make sure no children go hungry.”
That must go
hand-in-hand with programs to create more jobs, retrain potential members of the
work force and a law to raise the minimum wage.
If the cuts in child
allotments can really help families begin to stand on their feet, then it will
benefit not only them but Israeli society and the economy. But measures must be
implemented that will insure a safety net for those that start free-falling
through the cracks.