The new arrangement regarding monthly child allowance payments and Bituach Leumi are getting underway. Under the new plan, the state deducts NIS 50 from each child’s payment and this money will be placed into a savings account until the child reaches adulthood.
The new program is being called “A savings account for every child” and the government feels this will provide every child in Israel with a minimum amount of money when s/he becomes an adult. Opponents to the plan, primarily the chareidim, feel every last shekel of the monthly payments is required to pay for the expenses of the children.
For parents who can afford and wish to do so, they may add NIS 50 per child to make the monthly amount NIS 100, which continues until the child reaches the age of 18. In addition, when the child reaches 18 the state will deposit an additional NIS 500 and if the account is not cashed in, and an additional NIS 500 at the age of 21.
The parents have the option of a bank or investment track for the money. The state has undertaken to pay all fees for either type of account until the child turns 21.
This will provide all children with at least NIS 20,000 when they turn adults, which the state feels will be advantageous for most of today’s children.
(YWN – Israel Desk, Jerusalem)
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2 Responses
A version of the tax credit system the UK had until a few years ago. Very expensive and had to be discontinued. I wonder if this way is sustainable. Would be great if it was.
The monthly child allowance remains the same; the NIS 50 is added, not deducted. In other words Bituach Leumi is now allocating an additional NIS 50 per child. You could argue that if they are going to increase the child allowances, parents need it now, not in the form of a savings plan, but that is certainly debatable.