Cabinet approves tweaked plan giving virus stimulus handouts to most citizens

Netanyahu says NIS 6.5 billion plan will help ‘move the wheels of the economy in order to put people back to work’

People wearing face masks due to the coronavirus outbreak shop for groceries at the Mahane Yehuda market in Jerusalem on July 21, 2020. (Olivier Fitoussi/Flash90)
People wearing face masks due to the coronavirus outbreak shop for groceries at the Mahane Yehuda market in Jerusalem on July 21, 2020. (Olivier Fitoussi/Flash90)

The cabinet on Sunday approved the government’s plan to send stimulus checks to most Israelis as part of efforts to invigorate the economy during the coronavirus pandemic. Following public criticism the plan was slightly reduced from its original form, which would have seen all citizens get grants..

Under the plan, which excludes high-earners, single Israelis aged 18 and over will each receive NIS 750 ($218). Couples with one child will receive a one-time payment of NIS 2,000 ($583), rising to NIS 2,500 ($729) for those with two children, and NIS 3,000 ($875) for those with three or more.

At the opening of the meeting, Netanyahu said the plan will be quickly submitted for Knesset approval “so that the money reaches you, citizens of Israel, as quickly as possible.”

“We are also working on additional plans to stimulate the economy and channel funds to those who have been hurt by the coronavirus,” Netanyahu said. “We will continue to move the wheels of the economy in order to put people back to work.”

Some NIS 6.5 billion ($1.9 billion) will be allocated for the grants, which will be given to all citizens with the exception of “those earning over NIS 640,000 (approximately $186,000) per annum and senior civil servants earning over NIS 30,000 (approximately $8,700) per month.”

People who are not already receiving government stipends for one reason or another, and thus whose bank account information is not already possessed by the state, will likely be required to apply online and submit that data.

During a national lockdown in March-April the Israeli economy came to an almost total standstill. Unemployment soared to 26% and over a million Israelis were out of work. Over the past few months restrictions have mostly been lifted but unemployment remains at over 20% with some 800,000 Israelis in the job market, according to the Israeli Employment Service. The government, and in particular Netanyahu, has faced harsh criticism and growing protests over their handling of the financial impact of the virus and the provision of aid to the population.

Senior Finance Ministry officials, including budget chief Shaul Meridor and director general Keren Terner Eyal, opposed the plan ahead of its unveiling, likening it to “throwing suitcases of money that we don’t have into the sea,” Channel 13 news reported.

Prime Minister Benjamin Netanyahu (R) and Defense Minister Benny Gantz at the weekly cabinet meeting, at the Foreign Affairs Ministry in Jerusalem, on July 5, 2020. (Amit Shabi/POOL)

Last week the government added NIS 480 million ($140 million) to the budget for the package. The additional funds will pay for larger handouts for Israelis who are in greater need of financial aid. The change in the plan was made following demands by the Blue and White party, Hebrew media reported.

It wasn’t immediately clear which groups will receive the increased funding, but the Prime Minister’s Office said last Sunday that people “receiving support payments for convalescent care, [people who are have] handicapped status, [people getting] unemployment benefits, needy new immigrants (who have been in the country for at least two years), the unemployed over 67, and the elderly who receive income supplements” will all receive larger grants.

Under the initial plan unveiled by Netanyahu and Finance Minister Israel Katz, all Israelis over 18 years old were to quickly receive at least NIS 750 ($218), regardless of income or whether they were hurt economically by government measures to contain the virus.

However, after criticism from top finance officials, Netanyahu’s coalition partners and the public, the proposal was tweaked to its current format.

According to a Channel 12 news poll published last week, 56 percent of Israelis believe Netanyahu’s handouts-for-all package was motivated primarily by political considerations, versus 36% who believe it was conceived out of a desire to juice the economy. Another 8% did not know.

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