|
|
NEWS
Senior National Insurance Official: "Children's Allowance
Recipients Hit Twice"
by G. Lazar
According to a senior official at the National Insurance
Institute, sectors that are eligible for children's
allowances for large families are hit twice in the new
budget: by the 12 percent reduction in children's allowances
to be implemented as part of the two percent cutback on
government ministries in the 2002 national budget, and even
before that by the 50 percent erosion in real terms over the
past 25 years because the allowances are not linked to the
average nationwide income as are most transfer payments.
The official told a Yated Ne'eman reporter that while
all other National Insurance allowance are linked to average
income figures, the children's allowance for large families
is linked to the price index, a policy that has resulted in a
significant erosion since the allowance was first
implemented. In the year 2000, for example, when other
National Insurance payments were increased by 6.1 percent,
the children's allowance rose a mere 1.2 percent. Today
children's allowances represent only 2.5 percent of the
average household income.
According to figures National Insurance Deputy Director-
General L. Achdut presented to the Knesset Finance Committee,
the weakest sectors, which include most chareidi families,
will be hit the hardest by the reduction in the children's
allowance. For many, where the children allowance constitutes
a significant portion of their income, the cutback could mean
a reduction of up to 4 percent of their monthly household
income.
Last week the Finance Committee rejected a proposal by MK
Rabbi Moshe Gafni to diminish the cutback to 9 percent
instead of 12 percent. Only MKs from United Torah Jewry and
Shas supported the proposal. MK Rabbi Shmuel Halpert noted
that National Insurance funds are derived from the public and
the allowances actually represent a partial return of the
monthly payments to National Insurance, not a handout to the
public.
Twenty-five years ago the Ben Shachar Reform exchanged the
income tax "credit points" system for a social benefit
program based on the number of children per household. The 50
percent erosion over the years subverts the reform's goal.
On several occasions the National Insurance Institute has
stated that it holds large amounts of unutilized money for
children's allowances in reserve funds. As recently as 1999,
the Finance Ministry transferred NIS 18 billion ($4 billion)
that had been collected in the children's allowance budget to
other departments; in 1998 NIS 10 billion in surplus funds
were transferred out of the children's allowance budget; in
1997 the figure was NIS 6 billion.
Although it was originally proposed that the cutback be
retroactive, in the end it was agreed that it would start
from the next payments in March, and would be limited to the
year.
An annual publication called Yaldei Yisrael published
an annual report that the Council for Children's Welfare
presented to the Knesset's Employment and Welfare Committee
last month. A close examination of the report shows, based on
figures gathered by the Central Bureau for Statistics and the
National Insurance Institute, the following alarming
facts:
Out of 2.152 million Jewish children (not including East
Jerusalem), one-fourth of the total (480,000) live below the
poverty line. In the year 2000, 370,000 children (18 percent)
are from families that subsisted only on unemployment
benefits or guaranteed-income benefits. The number of
children whose parents receive guaranteed-income supplements
increased by 200 percent over the last decade, while the
number of children whose parents receive unemployment
benefits rose by 55 percent over the last five years to a
total of 120,000 children.
In a conversation held some time ago, then National Insurance
Director-General Yochanan Shtessman told a Yated
Ne'eman reporter that if the Finance Ministry's initial
proposal to completely cancel the new children's allowance
law had been accepted, another 50,000 families, including
100,000 children, would have been brought into poverty.
National Insurance workers say the 12 percent cutback will
bring thousands more children into poverty.
| Number of children | Previous allowance |
Cutback | New allowance |
| 1 | 174 | 21 |
153 |
| 2 | 348 | 42 |
306 |
| 3 | 695 | 83 |
612 |
| 4 | 1,398 | 168 |
1,230 |
| 5 | 2,266 | 272 |
1,994 |
| 6 | 3,134 | 376 |
2,758 |
| 7 | 4,002 | 481 |
3,521 |
| 8 | 4,870 | 584 |
4,286 |
| 9 | 5,738 | 689 |
5,049 |
| 10 | 6,606 | 793 |
5,813 |
|
