Welfare Chapter State of the Nation Report 2025:
- Social expenditure has increased only slightly, although its share out of the total government expenditure has decreased
- The majority of the rise in social expenditure is the result of war-related budget increases
- Between 2023 and 2025 the number of those entitled under the program for victims of hostilities grew by 465%
- Within the past decade, public housing stock has decreased by 18%
- Many social work positions remain unfilled
- The shortage of social workers and the heavy workloads they face are particularly pronounced in disadvantaged local authorities
Taub Center researchers Prof. John Gal, Shavit Ben-Porat, and Yael Ovadia examine the activity of Israel’s welfare and social security systems in 2024, In the welfare chapter published as part of the State of the Nation Report 2025. The findings show that the sharp rise in total social expenditure was driven mainly by the expansion of benefits and payments directly related to the war, while spending on welfare services, public housing, and long-term care systems declined. The study points to a persistent gap between the budgetary response to emergency needs and the set of responses available to the system in normal times, indicating structural weaknesses in the welfare system.
Growth in welfare budgets for war needs alongside ongoing erosion in budgets for routine needs
In 2024, about NIS 400 billion of the state budget was allocated to social expenditure, a real increase of about NIS 38 billion compared with the previous year. However, net of expenditures directly related to the war, the actual increase amounted to only about NIS 11 billion. Social expenditure per capita was NIS 40,784, an increase of 7%, but without the war component there was no real increase over 2023.
The share of social expenditure out of total government expenditure fell to 59%, its lowest level since 2013, in part due to the rise in non-social spending, and in particular war-related spending. Social expenditure as a share of GDP stood at about 20% in 2024. In international comparison, Israel’s level of social expenditure is relatively low, even compared with countries that are not considered highly developed welfare states.
Share of social expenditure out of all government expenditure, by category
Growth in social security spending alongside cuts in welfare services
Looking at the services provided by the government’s social ministries — excluding the Ministries of Education and Health — shows that in 2024 spending in these areas declined relative to 2023, mainly due to a roughly 29% reduction in housing expenditure. Within the areas of social welfare, only spending on employment and on areas under the responsibility of the Ministry of Welfare and Social Affairs increased, and even then, only moderately. The budget of the Ministry of Welfare and Social Affairs has risen in real terms since 2010 from NIS 5.1 billion to NIS 11.7 billion in 2024 — a 2.3-fold increase — even though the number of service recipients remained stable over this period and even declined slightly in some years.
Social security is the welfare state’s main area of activity in terms of financial resources, consisting primarily of benefit payments through the National Insurance Institute, alongside the activity of the Ministry of Defense Rehabilitation Department and designated grants. In 2024, expenditure on National Insurance Institute benefits rose to about NIS 172 billion, compared with about NIS 140 billion in 2023, due in part to demographic trends and policy changes. Most of the increase stemmed from war-related expenditures, including benefits for reserve soldiers and for victims of hostile acts, and October 7 War grants, which totaled about NIS 34 billion in 2024. Expenditure on benefits for reserve soldiers alone reached about NIS 26 billion. At the same time, disability and long-term care benefits stood out: spending on them increased in 2023–2024 by more than NIS 3 billion and about NIS 2 billion, respectively. By contrast, expenditure on the income support benefit continued to decline and in 2024 stood at NIS 1.64 billion, compared with NIS 1.7 billion in 2023, alongside a drop in the number of eligible recipients from 60,316 to 57,093.
The wars in 2024 and 2025 had a significant impact on the activity of the National Insurance Institute and the Ministry of Defense Rehabilitation Department. Unlike one-off grants, ongoing payments — such as payments to victims of hostilities who have been assigned a disability percentage, or benefits for IDF disabled veterans and bereaved families — are expected to accompany the social security system over the long term. Therefore, any change in these programs following the war has a lasting impact on these institutions’ expenditures.
The program for victims of hostilities is the main framework for assisting civilians harmed in the October 7 massacre. Changes in the program are evident both in the number of eligible recipients and in the characteristics of the injury. The number of eligible recipients rose from 5,706 in 2022 to 32,261 in April 2025. Of the additional victims recognized, about 92% were recognized for psychological injury (24,212 people), about 4% for physical injury (1,169 people), and about 4% for both psychological and physical injury (1,048 people). The National Insurance Institute reported that about 45,000 additional applications for recognition of injury are being reviewed. As a result of this increase, expenditure on the program rose from NIS 613 million in 2022 to NIS 2.5 billion in 2024 — a more than four-fold increase within two years.
Total number of victims of hostilities, by officially recognized disability type
Severe shortage of social workers, especially in disadvantaged localities
The study points to a severe shortage of social workers in social services departments across the country. As of August 2025, about 18% of established positions are unfilled, and the system is short 1,333 social workers. Although there is a supply of people trained in the field, the Ministry of Welfare and Social Affairs has difficulty recruiting and retaining staff in the departments. According to the Ministry’s data, about 40% of social workers who begin working in the departments leave within a few years: 55% leave already in the first year and another 15% in the second year. Notably, precisely in localities with high poverty rates — where social distress is most acute and the need for social workers is greatest — the share of unfilled positions is higher, at 23%, compared with only 16% in localities with low poverty rates. A sectoral breakdown shows that the share of unfilled positions is particularly high in Bedouin local authorities, reaching about 24%, compared with about 17% in non-Haredi Jewish local authorities. A sharp decline in staffing rates was recorded in local authorities evacuated during the war, from about 92% before October 2023 to about 71% in August 2025.
Alongside the staffing shortage — and to a large extent because of it — the workload borne by social workers in social services departments is especially heavy. For example, in the poorest localities, the number of service recipients per social worker is almost 1.5 times higher than in localities with low and moderate poverty levels — 264 versus 183 on average. The gaps are also evident between local authorities with a severe staffing shortage, where the number of service recipients per social worker reaches 259, and local authorities with a low shortage, where the figure stands at 176.
Public housing is shrinking while the number of eligible households is rising
An analysis of the Ministry of Construction and Housing’s budget data — which is responsible for implementing housing assistance policy — points to a sharp and ongoing decline in the priority given to housing within the government’s budget. This decline was especially pronounced in the first decade of the 2000s. Over that decade, the share of spending on housing fell from 4% of total government expenditure in the early 2000s to about 1% in 2010, and since then it has hovered around that level. In 2024 it fell further, to only about 0.7%.
Over the past decade, spending on rent assistance has risen steadily, from about NIS 1.7 billion in 2014 to about NIS 2.7 billion in 2024. By contrast, spending on public housing has remained low and volatile, although in 2023–2024 a renewed increase is evident following earmarked allocations for the purchase of new apartments.
In 2014–2024, the stock of public housing apartments shrank by about 18%, from about 57,800 units to about 47,100. At the same time, the number of eligible households waiting for public housing rose by about 67%, from about 2,600 in 2014 to about 4,300 in 2023. This gap is reflected, among other things, in an increase in waiting time for an apartment by almost a full year — from 2 years and 1 month in 2016 to 2 years and 11 months in 2023.
In international comparison, the scope of social housing in Israel is particularly low. In Israel, the share of rental dwellings in the social housing framework stands at only about 1.8% of all dwellings in the economy, compared with an OECD average of about 7.4%.
Prof. John Gal, Principal Researcher and chair of the Taub Center Welfare Policy Program, says: “Over the past two years, the war has cast a heavy shadow over the welfare systems. Now is the time to address not only the consequences of the war but also Israel’s fundamental social problems — foremost among them poverty and inequality — and the severe shortage of resources and manpower in welfare services.”
Prof. Avi Weiss, editor of the report and President of the Taub Center: “Israel’s welfare system has faced structural weaknesses in recent years, and the war has accelerated and deepened erosion that was already underway. Its central challenge now is to formulate a long-term policy to strengthen welfare infrastructure and the professional workforce, guided by a strategic view that these are fundamental pillars of the Israeli society’s national resilience.”
The Taub Center for Social Policy Studies in Israel is an independent, non-partisan socioeconomic research institute. The Center provides decision makers and the public with research and findings on some of the most critical issues facing Israel in the areas of education, health, welfare, labor markets and economic policy in order to impact the decision-making process in Israel and to advance the well-being of all Israelis.
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