On the 20th of every month, without fail, Bituach Leumi (the National Insurance Institute) deposits NIS 691 in my bank account simply because my wife and I have three young children. Bituach Leumi does not ask if we need it or not, if we are employed or not, or if we served the country. They simply give us money. To be honest, we love it. We work hard, taxes and the cost of living in Israel are high, and who says “no” to money?
There have been times in the past when this child allowance helped us buy necessities that we otherwise would not have been able to afford, but right now, Baruch Hashem, we can survive without it. Sure it is nice to go out for another nice meal, buy an extra bottle of whiskey, or have a little less stress at the end of the month, but I cannot imagine that this is what child allowances were meant for. As there are so many families that are struggling, I feel that this money can be much better spent.
While 691 shekels a month is really nice for us, for others, it can mean milk, bread, or shoes for their children. If we can survive without this handout, there are surely many other families that do not need it either. There are many families in income tax brackets higher than mine. What do they use their child allowance for?
Having been born and raised in America, a handout like this is not something I expected, nor something I feel entitled to. It is very nice to know that there is a support structure in place and that we would have it if we need it, but I suggest that child allowances be revised. I believe the amount a family receives each month per child should be based on the family’s income. Families in the lowest income bracket should of course receive far more per child, while middle class families receive less, and upper class families receive little, or none at all. The total amount of child allowances paid out by Bituach Leumi need not rise, this change would simply allow more of the total amount to go where it is needed the most.
I do make one exception. I would not raise the benefits for families that choose not to participate in the workforce. Only if you are working, or actively looking for work, should the increase in benefits apply. In America there is no concept of a child allowance, but there is a child tax credit. Families are not eligible for that credit if they are not working. Israel already has a very delicate problem with workforce participation, with one of the lowest participation rates in the OECD. Increasing handouts would further encourage that trend, however making the increase in benefits for lower income earners contingent on participating in the workforce could motivate more people to seek employment.
There are currently many demands on Israel’s national budget, and no matter how we slice it, our resources are already stretched to their limits. Instead of asking for increased spending, I believe it is more important than ever that we get smarter with spending the amount already budgeted. Lets make sure the resources we have get to those who need it most.