Hike in Child Allowances and ‘Long Term Savings’ for Each Child Approved

YERUSHALAYIM ­ -

As per the coalition agreement with United Torah Judaism and the Likud, and after battling opposing views in the Finance Ministry, the Finance Committee approved a hike in child allowances and the “Long Term Savings Plan” for each child, agreed upon by Health Minister Rabbi Yaakov Litzman and Finance Minister Moshe Kachlon. After weeks of negotiations it was concluded that the savings will be in the name of the child, while management fees will be paid by the government.

When the money is withdrawn, the tax on the interest will be deducted via a grant that will be added to the child’s account. The parents will be able to match the same amount deposited by the state — NIS 50 a month – in order to increase the savings.

The hike in child allowance payments will be retroactive to May 1, 2015, and will be remitted beginning January 1, 2016. The deposit program will take effect on January 1, 2017, and concurrent to the regular NIS 50 per month payment, deposits will be made through December 31, 2019, to retroactively cover the period of May 1, 2015 to December 31, 2016. The deposits will be made until each child turns 18. If a child does not withdraw the money until age 21, he or she will receive another NIS 500 (in addition to the tax refund of NIS 500).

Parents of a child will be able to withdraw the money before the child turns 18 in order to cover medical expenses, with a letter from a specialist affirming that the funds are needed.