Labor minister: State cannot support 500,000 'new poor' Israelis

By EYTAN HALON

Published: JUNE 22, 2020 18:38

National Insurance Institute director-general Meir Spiegler (left) and Labor and Welfare Minister Itzik Shmuli (photo credit: LABOR AND SOCIAL SERVICES MINISTRY) — National Insurance Institute director-general Meir Spiegler (left) and Labor and Welfare Minister Itzik Shmuli

(photo credit: LABOR AND SOCIAL SERVICES MINISTRY)

"Many citizens, hundreds of thousands, are now reaching the end of their unemployment benefit eligibility and have no assistance," Shmuli told reporters.

Israel’s welfare services will be incapable of supporting half a million “new poor” Israelis by August, Labor and Welfare Minister Itzik Shmuli warned on Monday, as unemployed workers return slower than forecasted to the workplace as concerns grow regarding a second wave of coronavirus infections.

“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.”

According to data published by the National Insurance Institute (Bituach Leumi) on Monday, the expiring eligibility of current job seekers – should they not return to work by August – will leave over 369,000 unemployed Israelis without any benefits, and a further 100,000 with partial or full benefits.

“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.”

The Finance Ministry’s actions to date – including postponing the start date for benefit eligibility until April 19 – are “not bad but insufficient,” said Shmuli, highlighting differences of opinion between the ministries.

Figures published by the Israeli Employment Service on Sunday evening showed that over 350,000 Israelis have reported returning to work since restrictions on the economy were first eased on April 19. Since then, nearly 125,000 new applicants have submitted requests for unemployment benefits.

At the peak of the crisis, over 1.12 million people – 27.5% of the workforce – had submitted applications for unemployment benefits. Unemployment declined to 23.5% by the end of May, or a total of 960,000 individuals.

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National Insurance Institute director-general Meir Spiegler told reporters that extending unemployment eligibility until the end of August for all job seekers would cost the state a total of NIS 3.3 billion ($960m.).