Since the end of the COVID-19 pandemic, the political changes that have taken place in Israel have affected the social welfare field and have brought about significant developments and policy changes. The findings of this chapter point to, among other things, an increase in government expenditure, a significant decline in the number of unemployment insurance recipients, and in parallel an increase in the number of income support recipients. In addition, the shortage of social workers in the social services departments continues, particularly in local authorities where the greatest levels of social distress are seen.
Social expenditure has declined significantly relative to other welfare states
Social expenditure was about NIS 298 billion in 2022, a real decline of about NIS 17 billion relative to the previous year, and a continuation of the downward trend seen since 2020. A breakdown of this expenditure shows a decline of about NIS 13 billion in expenditure on social security and an increase of about one billion shekels in expenditure on education. Although there was a reduction of about NIS 5 billion in healthcare expenditure, total healthcare spending still reflects the increase that dealing with the pandemic required. The expenditure on social welfare increased by about one billion shekels in 2022, but a significant part of that is due to an increase in the Ministry of Immigrant Absorption budget to help integrate immigrants from Ukraine and Russia.
Although social expenditure in Israel relative to GDP is lower than in other welfare states, the proportion of that expenditure within total government expenditure is relatively high and in 2022 it even grew, such that 61% of government expenditure was devoted to social welfare. A breakdown of social expenditure reveals that 26% of government expenditure was devoted to social security, 16% to healthcare, 15% to education, and 3.9% to social welfare.
Shavit Ben-Porat, one of the study’s authors, comments: “The findings of the chapter with respect to the relatively large proportion of government expenditure devoted to social expenditure in 2022, alongside the increase in resources devoted to the implementation of the War Against Poverty Committee’s recommendations, demonstrate the importance attributed to social expenditure in that year.”
The National Insurance Institute (NII) is spending less on social security
The expenditure on pensions by the NII fell substantially, from about NIS 128 billion in 2021 to about NIS 113 billion in 2022. The main part of the decline is in expenditure on unemployment insurance — from about NIS 20 billion in 2021 to about NIS 3.2 billion in 2022. This decline reflects the dramatic drop in the number of unemployed and the number of individuals on unpaid leave with the return of a functioning labor market following the pandemic.
In addition, there was a drop in expenditure on the income support program, which is aimed at working-age individuals with particularly low incomes who have difficulty integrating into the labor market or whose labor income is particularly low. In 2022, only 1.5% of the expenditure on social security was devoted to this safety net. There has been a cumulative decline of 39% in the number of benefit recipients since 2015. There has been an increase in other NII types of expenditure, particularly benefits paid to the elderly and benefits for individuals with disabilities. Thus, for example, there has been an increase of 37% in the number of recipients of the general disability benefit since 2015.
There was a dramatic gap in the levels of expenditure on subsistence benefits at the beginning of 2023
The income support program and the general disability program are both intended to assist individuals who have little or no labor income; however, the study shows that there is a large gap in the benefit levels between the two programs. In August 2023, the monthly payment to recipients of income support was NIS 2,226 while the disability benefit was NIS 4,013 per month, a gap of NIS 1,787.
The food voucher program did not necessarily assist families under the poverty line
Following the decision to restart the food voucher program in 2023 and 2024 and the expansion of the conditions for eligibility, the Taub Center conducted a study of the program’s implementation in 2021. The study compared the number of families that received food vouchers in each city to the number families living below the poverty line in the same city.
The study showed that, in general, the proportion of families receiving food vouchers was smaller than the proportion of families living below the poverty line. On the national level, there was an average negative gap of 10%. In cities with a Jewish population, there was a negative gap of 8.9% while in Arab localities (not including Bedouin and Druze localities) there was a negative gap of 13.8%. In other words, in these two sectors the number of food voucher recipients was less than the number of families living below the poverty line in that locality. Bedouin localities had the largest negative gap (27.7%). In Haredi (ultra-Orthodox) localities, in contrast, there was a positive gap of 1.9%. In other words, there were more families receiving food vouchers than families living under the poverty line.
The findings of the research indicate that this program has assisted the Haredi public in particular and not necessarily just those living below the poverty line.
The shortage of social workers continues and is worsening
The shortage of social workers continues to draw the attention of the Knesset and the Ministry of Welfare and Social Affairs, primarily due to the difficulty in filling positions in the local authority social service departments. In 2022, the proportion of filled positions in these departments was 87% on average, which translates into 786 vacant positions. In 23 local authorities, one quarter or more of the positions are unfilled, and in particular in those local authorities with the highest level of social distress: Beitar Illit, Jisr az-Zarqa, Kseifa, Lakiya, Safed, and Rahat.
The participation of the local authorities in the budgeting of social services
In preparation for the Taub Center’s upcoming conference, we carried out a study of inequality in access to welfare services in Israel in 2021, with focus on the participation of the local authorities in the budgeting of welfare services and the implications for inequality in welfare.
The study shows that the gaps noted in previous studies continue to exist. The local authorities with the lowest socioeconomic ranking spend an average of NIS 4,596 on social services per recipient annually, in contrast to an average of NIS 10,898 (more than double) in local authorities with the highest ranking.
In a breakdown by population group, the disparity is even larger. The average annual expenditure on welfare services per recipient in the Bedouin local authorities is only NIS 5,103, in contrast to NIS 13,148 in the wealthiest localities.
The War Against Poverty: Taub Center researchers continue to monitor the implementation of the Elalouf Committee’s recommendations
Following the decline in 2021 in expenditure devoted to budget items related to the recommendations of the Elalouf Committee, in 2022, there was an increase to 46% of the level recommended by the Committee, as compared to only 30% in 2021. The budget items that increased include housing, healthcare, and welfare. In housing, the increase is related to expenditure on the purchase of a home and rent assistance; in healthcare, it is related to expenditure on student healthcare services and dental healthcare in the local authorities; and the increase in welfare and social security expenditure originates in the expansion of assistance programs for the elderly in the community, alongside a significant increase in expenditure devoted to income support for the elderly, in accordance with a 2021 government decision.
Another development in the implementation of the Committee’s recommendations is the renewal of efforts to establish an authority for the war on poverty. A proposed law to create the authority was recently approved on first reading by the Knesset.
Prof. John Gal summarizes as follows: “The chapter’s findings and an examination of the challenges that the welfare system faced prior to the war and during it are evidence of the importance and professionalism of the system’s workers. Nonetheless, there are significant problems in the areas of budgeting and manpower that constrain the system’s ability to provide solutions to those in need of assistance.”
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.
For details, or to arrange an interview, please contact Chen Mashiach, Taub Center Spokesperson in Israel: 054-7602151.