One in three Israeli children lives below the poverty line

In real terms, income dropped by more than 10% in 2020 due to the effect of Covid policies on the economy. 

By Donna Rachel Edmunds, World Israel News

More than one in five Israelis, including nearly one third of Israeli children, are living in poverty, with the situation set to worsen thanks to the hit to economy brought about by Covid policies, Israel’s National Insurance Institute has found.

The institute found that the poverty line for 2020, as calculated in relation to median net income per capita, was a monthly income of NIS 2,811 a month for individuals and NIS 5,623 for couples. A couple with a child, or a single parent with two children was considered poor if living on less than NIS 7,450 a month, while families consisting of two parents and three children were poor if their income was less than NIS 10,543.

Some 1.9 million people in Israel were living below the poverty line in Israel last year, including nearly 865,000 children, and nearly 158,000 people over retirement age. Poverty was highest in Jerusalem, Judea and Samaria, and Ashdod.

According to the report, the standard of living actually increased in 2020 by 2.4%, but only due to welfare payments. Had these not been made, the standard of living would have fallen by a real rate of 10.2%.

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This is in large part because GDP shrank by 2.5%, and employment by 9.4% as lockdowns and restrictions battered the economy. Most people were affected by the constriction of the economy, but those already on lower incomes were the most affected, driving up the Gini coefficient of income inequality, which jumped by a significant 4.2%.

Significantly, although in 2021 some parts of the economy have opened back up, the government took this as a cue to withdraw benefits, meaning that poverty is likely to have jumped again this year. In addition, restrictions on significant portions of the economy remain in place.

“The government’s policy, especially the decision to stop all unemployment benefits, has led to an increase in the poverty rate among the population in 2021 compared to the year before,” the report says.

Despite this, ministers have claimed the figures are a victory for the welfare system.

Minister of Welfare and Social Security Meir Cohen said, “What stands out most in the poverty report is that when the state intervenes and has a welfare policy, it helps weak populations and gets them out of poverty.”

The experience of the last two years should be a “wake-up call” to create a reformed, comprehensive welfare system, said Meir Spiegler, head of the Social Security system.