Moshe Kahlon .
(photo credit: EMIL SALMAN/POOL)
Soon enough, turning 18 will not only be a time to celebrate, legally drink alcohol, and enjoy adult status, it will also be a time to cash out.
An agreement between haredi parties and Finance Minister Moshe Kahlon announced on Tuesday for the upcoming budget would create an NIS 18,000 savings account for every Israeli, to be made available to them on their 18th birthday.
“Our children will get to age 18 and receive their first gift from the state: a piggy bank of NIS 18,000 to start their independent lives. This gift will cut across sectors, and doesn’t differentiate between religion, race or nationality,” Kahlon wrote on his Facebook page. “The rational is that every child will have money to purchase education that will help him in the job market.”
The agreement to create such a “piggy bank” offsets demands from haredi parties to increase child allotments and pay them retroactively. Instead of significantly increasing monthly allotments from the current NIS 140, they will rise to NIS 150 for the first child and NIS 188 for the next three children, before falling back to NIS 150 for subsequent children. Those amounts are still down from the child allotment payments that Kahlon’s predecessor, Yair Lapid, cut in 2013, the highest of which reached NIS 354.
In addition, an extra NIS 50 will be put into a savings account for each child, for a total cost of NIS 200 - NIS 238 to the government per child. That adds up to just NIS 10,800 over 18 years, but with interest it could exceed NIS 18,000 over time. Some versions of the account would allow parents to pay into the account over time as well.
The funds will be available with some restrictions at age 18, and no restrictions by age 21.
Some of the details of how the funds will operate are yet to be worked out, but the scheme is not to begin until 2017, meaning that the first children to fully benefit from it (who are not yet born) will not get a payout until 2035. Children who turn 18 in the interim will receive the amounts that have been saved in their names up until that point.