After a lengthy and loud discussion, the Knesset Finance Committee approved a NIS 1.2 billion cut in the state budget. Most of the money saved will go toward funding a government program that will provide a savings account for each child, from birth to age 18. Other changes in the budget will include a transfer of NIS 1.26 billion from state ministries to “immediate funding needs.”
Commenting on the cuts, Committee Chairman MK Rabbi Moshe Gafni said that “I, like other MKs, don’t like to cut programs, but who could be opposed to it when the cause is to open savings accounts for children?”
The savings plan provides money for kids from one day old through 18 years of age, and will be automatically allocated and sent to an account set up for children. Children whose parents do not open accounts for them will still receive the cash, but the accounts will be held by the Finance Ministry, with the money allocated in the name of the recipient. Parents also have the option of requesting that NIS 50 of their child allowance payment be transferred to their children, so that instead of saving NIS 600 per year, children will get credited with NIS 1,200 per year.
The program begins January 1, 2017, and children born after that date will receive an additional NIS 500 on their 18th birthday, for a total of NIS 11,300 or NIS 22,100 for those who save NIS 100 per month. At that time they will be allowed to withdraw their funds, but if they leave the money untouched until their 21st birthday, they will receive an additional NIS 500. The program is retroactive to May 2015, so essentially all children born after that date will receive the full funding. Children born before that date but who have not yet reached 18 years of age will receive the amount saved on their behalf from May 2015 through their 18th birthday.
The decision to cut ministry budgets was preceded by a vociferous exchange among committee members, with opposition MKs Miki Levy (Yesh Atid) and Stav Shafir (Zionist Camp) calling the budget “a big bluff” based on “the lies of Finance Ministry functionaries.” In response, MK David Bitan (Likud) said that the “populism of the opposition is out of place. It should be clear that the changes we have made were in cooperation with the relevant ministers and in areas where cuts were possible without harming the public or the order of priorities for ministries.”