The Knesset Finance Committee on Monday evening 26 Cheshvan approved the state’s plan to open a savings account for each child. The state will deposit NIS 50 a month and parents will have the option of matching the sum from monthly child allowance payments, to be locked in the account until the child is an adult. The state set a ceiling for the matching of NIS 140 monthly.

The money will be available to the child at the age of 18 with the signature of one’s parents, or at the age of 21 without parental approval. From the age of 18 to 21, if the money is left in the account, it will continue to accumulate interest.

One of the issues that has been delaying the committee’s approval of Gafne’s demand that the interest earned on these accounts remain tax free. As the bill stands now, if a child pulls the money at the age of 18, NIS 500 will be added and if left till 21, an additional NIS 500 will be added. Pulling the money prior to the age of 18 is possible under certain conditions, such as a letter from specialist physician documenting the need. In such a case, one would receive NIS 500 as well.

(YWN – Israel Desk, Jerusalem)