Crisis Looms as Unemployment Benefits Run Out

The pace of workers returning to the economy has not been matching expectations, and as unemployment benefits begin to run out, the Israeli government will be hard-pressed to cope with the situation.

That was the grim word from Labor and Welfare Minister Itzik Shmuli (Labor) on Monday, who said that the state does not have the capacity to support half a million “new poor” Israelis by August.

“Many citizens, hundreds of thousands, are now reaching the end of their unemployment benefit eligibility and have no assistance,” Shmuli told reporters. “The main problem is for young people whose eligibility period is shorter. 70% are young people under the age of 27.”

Shmuli’s comments were timed for the release of the latest data from the National Insurance Institute, which warned that if the current job seekers do not return to work by August, the country will be faced with over 369,000 jobless without any benefits, and another 100,000 with partial or full benefits.

As to what should be done, the minister broadly suggested some priorities.

“Our first challenge is to support those Israelis who will be able to keep their heads above water. Many of them have families,” said Shmuli. “[We need] to launch aggressive plans beyond the Finance Ministry’s incentives for employers. This is a ticking time bomb.”
He called the Finance Ministry’s financial aid measures to date “not bad but insufficient.”

Shmuli urged an extension of the eligibility period for making unemployment claims.

Although the Finance Ministry has previously granted extensions for unemployment benefits, earlier this month it said that would expire in June. Special stipends to unemployed workers over the retirement age of 67, which were paid in March-May, will also be ending.