Trends in Welfare Benefits and Services
Author: Taub Center Staff
September 21, 2010
Over the last two decades, the total amount of support to people with disabilities rose substantially, while the proportion of transfer payments directed to child allowances and unemployment benefits declined. In welfare services, a relatively new approach that is gaining strength is the “supportive communities for the elderly.”
In the area of welfare benefits and services, 2009 was a year of changing trends alongside the creation of a basis for more substantive changes that may affect the face of welfare services in years to come. These changes are described by John Gal in the Taub Center’s “The State of the Nation Report: Society, Economy and Policy 2009” and the main findings follow.
Welfare Benefits in Israel – The Broad Picture
Alongside gradual, persistent growth in the total amount of transfer payments since 1990, it is possible to discern certain trends. Child allowances, which were cut sharply from the beginning of the decade until 2008, began in 2009 to rise again and are continuing to rise in 2010. Even so, their share of total allowances has been gradually declining since 1990 (see figure). At that time, child allowances were 20% of total allowances; their share declined to 19% in 2000 and to 13% in 2010.
Expenditures on unemployment insurance grew by more than 20% in 2009 compared with 2008. The increase stemmed from an increase in the number of unemployed due to the economic crisis which began at the end of 2009, as well as an easing of some restrictions on entitlements. In 2010, as Israel emerges from its recession, a near 5% decline is anticipated in this component. Even so, as evidenced in the figure, the share of unemployment in total benefits in the recession year 2010 was only about half what it was in the boom year 2000.
One area which grew substantially in recent decades was general disability. In 2008, general disability benefits were NIS 2.3 billion (in 2008 prices). In 2010, the total amount of benefits is expected to reach NIS 10.3 billion (in 2008 prices). The share of disability benefits rose from 11% of total benefits in 1990 to 14% in 2000 and 20% in 2010.
Despite these increases, the assistance provided for individuals living below the poverty line by transfer allowance programs is limited. This constraint reduces the government’s ability to deal effectively with high levels of income inequality and poverty in Israeli society and it reduces the likelihood of raising families with children above the poverty line.
Income Maintenance and the Supreme Court
The income maintenance program was intended to provide a safety net for those of working age who lack sufficient means for a minimum, dignified standard of living. The program was built around those who seek yet are unable to find paid work. Assistance was conditioned on efforts to enter the labor market. Recipients were required to report to the employment office or employment center at fixed intervals, to investigate employment opportunities, and to make an effort to accept employment opportunities.
With the institution of this program in 1982, a parallel program was established for Haredi (ultra-Orthodox) men who study in kollel (advanced Torah study academy). This program provides an allowance to Haredi men with at least three children and studying on a full-time basis in a recognized kollel. A relative low percentage of those studying receive this allowance: of the 63,000 kollel students in 2009, some 11,000 were eligible for the program. In 2000, this track was challenged in the Supreme Court on the grounds that it discriminated unfairly in favor of one group of students – kollel students – to the disadvantage of other students, particularly college students. The Supreme Court delayed a decision on this petition for ten years, in the hopes that the government would formulate an arrangement that would make a legal resolution unnecessary, but no such arrangement was reached. In June 2010, the Supreme Court ruled that the arrangement is illegal. The program will be able to continue only if the Knesset legislates a program that sets substantive criteria that justify the preference given to kollel students.
Welfare services are provided to a wide variety of weakest populations. Assistance is in the form of programs as well as individual, family and group therapy and supervision and provision of community and institution-based services. These services are provided by municipal welfare departments, the Ministry of Social Affairs and Social Services, as well as through non-government organizations (NGOs and the business sector).
Government expenditure on welfare services has been rising continuously since the beginning of the decade. Judging by the proposed budgets for the next two years, this upward trend is expected to continue.
Services for the elderly are an important component of personal social services with the majority of the budget designated to funding long-term care services for the elderly and elder people with disabilities who continue to live in the community. Alongside these services, one of the important developments in the area of welfare services is “supportive communities for the elderly” located in geographic areas with high concentrations of elderly. Individuals are provided with “panic buttons,” assistance from a community coordinator, emergency medical services when needed, and participation in social activities.
The communities were developed following an initiative of JDC Israel’s “Eshel” organization during the years 1995-1996, and are operated with the aid of the Ministry of Social Affairs and Social Services. The following figure shows that there has been a rapid increase in the number of such communities over the past decade, from only 28 in 1998 to 220 in 2008. While 6,400 households took part in these communities at the beginning of the decade, the number neared 30,000 towards the decade’s end.
A policy move that may have major ramifications for the future of welfare services in Israel was the creation of a public commission under the auspices of the Minister of Social Affairs and Social Services, Isaac Herzog and chaired by Yekutiel Sabah. The recommendations of the reform commission constitute a comprehensive effort to re-examine the existing personal social services system, with all its characteristics, variations and limitations, while defining the outlines of a new policy suited to the coming years. Central to the recommendations is the preservation of the division of responsibilities and financing between the Ministry and the social services departments; support for a Social Services Law; and increased involvement in dealing with issues of poverty and unemployment in Israeli society. These recommendations are not accompanied by a detailed timetable. However, it is anticipated that their impact will be felt in the coming years, and they will lead to a social service system better suited to the needs of the service users and the abilities of the providers.