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2005 Budget will Increase Poverty
Globes
Israel
November 22, 2004
BBC News (AP)
"The series of measures taken by the government in the past three years are having their effect. The massive cuts in allocations are seen in the poverty report for 2003," said National Insurance Institute director general Dr. Yigal Ben-Shalom at the opening session of the Institute of Tax Advisors in Israel in Eilat last night.
Ben-Shalom was referring to the 4% cut in old-age pensions, the elimination of linkage to the average wage, the NIS 4 billion cut in childrens' allowance, and the more than 30% cut in income support payments, among other things.
Ben-Shalom said the 2005 budget showed signs of additional cuts. "For instance, the government proposal to cut employer's NII contributions by 1.5% will undermine the NII's actuarial reserves and increase its deficit by NIS 3 billion. There is growing concern about a further reduction in policyholders' rights."
Ben-Shalom said the NII had prepared a plan of action, to be published soon, which "will provide an equitable ratio between dues and pensions, and create a fair model for social security."
Ben-Shalom said the elderly who subside solely on pensions will receive an extra NIS 80-200 as of January 1, 2005. 200,000 elderly, mostly new immigrants, will be eligible for the extra pension.
The NII is also preparing a socio-economic model to predict how the 2005 state budget will affect social welfare gaps.
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