The number of income guarantee claimants in Israel fell to 45,800 in August, marking the lowest figure in three decades, according to the Employment Service's Labor Market Pulse report. This significant drop comes despite the population almost doubling since 1995, when the number of claimants was much higher.
On the surface, the decline could be viewed as a positive development, as the income guarantee is meant as a last-resort safety net for those unable to work. Fewer claimants might suggest that more people are finding employment and escaping poverty. However, experts warn that the reality is more complicated. The meager amount provided by the income guarantee—ranging from NIS 1,570 to NIS 5,000, depending on family size—may be forcing individuals to take up work, even if their health or family situation makes it difficult.
The report also highlights concerns over Finance Minister Bezalel Smotrich's proposed freeze on income guarantee allowances in 2025, which could further erode their value. Given that these benefits are already linked to the consumer price index rather than the faster-rising average wage, many fear that the most vulnerable populations will be left in an even worse situation.
A Safety Net That's Falling Short
The purpose of the income guarantee is to provide a minimum subsistence allowance for individuals who have exhausted unemployment benefits and are unable to secure employment. The allowance is a crucial indicator of poverty levels in the country, as those who qualify often face severe financial hardship.
Despite its importance, the allowance amounts are inadequate to sustain a minimal standard of living. Individuals receive between NIS 1,570 and NIS 2,450, while couples may receive between NIS 2,160 and NIS 3,680. A couple with two children can receive between NIS 3,820 and NIS 5,000, amounts that critics say do not allow for dignified living. Moreover, the stringent requirements for receiving the allowance, including a thorough check of both spouses' income, further complicate access for many families.
A Historical Perspective on Decline
The decline in claimants is not a new phenomenon. Following former Finance Minister Benjamin Netanyahu's 2003 economic reforms, the number of income guarantee recipients peaked at around 200,000. The "Employment Circles" program, aimed at integrating long-term unemployed individuals into the workforce, significantly reduced that number. By February 2020, on the eve of the COVID-19 pandemic, the figure had dropped to 60,000.
Since the pandemic, the numbers have continued to decline, even amidst the ongoing war and rising living costs. The Employment Service attributes this to an increase in demand for low-wage workers, which has led many to accept jobs despite challenging conditions.
Future ConcernsSharp Decline in Income Guarantee Claimants: Lowest in 30 Years Amid Rising Cost of Living
As living expenses continue to soar and wages in certain sectors remain stagnant, the need for a comprehensive review of income support policies is growing. Critics argue that without significant adjustments, more individuals will be forced into precarious work situations, potentially exacerbating inequality in the country.
